
" "'x^;/ °v^/ !X^>'*!." 



5 » I < 






^""^ 






' "^^d« : 



^o. 










THE A B C OF FOREIGN TRADE 



THE ABC 

of 

FOREIGN TRADE 



By 
FRANK HENIUS 



INDIANAPOLIS 

THE BOBBS-MERRILL COMPANY 

PUBLISHERS 



OoPTBIGHT 1920 

The Bobbs-Mek«iix CX>mpant. 



rr 



.n't 



Printed in the United States of America 



FEB !2i32Q 



I OF 

BRAUNWORTH & CO. 

BOOK MANUFACTURERS 

BROOKLYN, N. Y. 



©ci.A561833 



FOREWORD 

The author of this volume has never written a 
book before. This naive confession is intended to 
explain if not excuse certain deficiencies, perhaps 
of construction, form, style, diction. But the sub- 
stance is here, and it is the fruit of a varied expe- 
rience of some fifteen years of active service in 
the field of foreign trade. 

The title of this book is to be taken literally. It 
is the A B C of foreign trade. In it the author 
seeks to teach the subject to those who seek to 
learn. 

iAnybody of ordinary intelligence who reads 
this book and who follows the directions herein 
contained will be able, without any other study 
or preparation, to engage in foreign trade, and 
to do business in the right way from the begin- 
ning. How much business he can do will depend 
necessarily on the demand that exists for the ar- 
ticle he is vending, and on the extent to which he 
is offering good value. 

The subjects which the author seeks to cover in 
this "Export Grammar" have been treated in 
such a way, sometimes at the expense of iteration 
and reiteration, as to give the reader the fullest 
possible comprehension of the essential facts and 
principles involved. 

"America First" is as good a slogan in the 
export field as it is in any other., jn. H. 



CONTENTS 

OHAPTEB PAGF 

I Thh Export Business • . • • • .^ r » 1 
Four Essentials— A B G— The A of the AI- 
phabet — ^A Domestic Comparison — How to Get 
Orders—Your Letter— Additional Data— Sim- 
ple Essentials. 

II How To Get In Touch ..... . . * 17 

America in Favor — ^Expense of Foreign Busi- 
ness — To Whom to Send the Letter — Cata- 
logues and Folders — ^Weights and Measures. 

Ill YouB Peoducts and Peices ...... •^ 31 

Frankness and Accuracy — ^Prices and Discoimts 
— ^Your American Prices — ^Wholesaler, Re- 
tailer and Consumer — Quantities and Dis- 
counts — Another Sample — ^A Square Deal. 

TV Change of Prices . ...... *^ . 48 

Without Notice — Weights and Measures*-* 
F. O. B. and C. I. P. 

V Fn^s AND FoLLow-up Letters . . . . v .; 58 
Countries and Subdivisions — Extra Carbon 
Copies — The War Trade Board — Desired In- 
formation — License Application. 

yi The Receipt of the Order . • . . . #< .? 70 
For the Long Run — ^The Right Connections — 
Studying the Order — Every Letter a Possibil- 
ity — Sample Illustrations of Letters. 

VII Fhling the Order . .... *- . .. .- 87 
Packing — Packing Cost — Checking and Protect- 
ing — ^Weighing and Listing— Use Every Care 
— Cubic Measurements — Gross and Net — Mark- 
ing Freight for Export. 

VIII Sample Orders .....:«- •• •• » ■•^ .^ 117 
Invoices — The Shipment. 



CONTENTS— 'Continued 

CHAPTEB PAGE 

IX Teanspoetation . . . . . . • . .1 . 126 

steamship — ^Railroad Bill of Lading — Steam- 
ship Bill of Lading — ^Freight Rates — Loading 
—Permit — Declaration — Copies of Record — 
Consular Invoices. 

X The Freight Foewardeb . ...... 133 

The Honest Forwarder — The Dishonest For- 
warder — ^Written Statement — ^Lowest Cost Pos- 
sible — ^Playing Safe — The Booking Fee — Legiti- 
mate Function — Insurance Forwarders. 

XI FUETHEE ON FoEWAEDEES w- 152 

Forwarder's Bill of Lading — Rate Card — Con- 
solidated Carloads — Padding — Fake Charges — 
Financing by Forwarders— Advantage of For- 
warders. 

XII The Deawbaob; ........ . . 166 

XIII Selling on the C. I. F. Basis ...... 171 

Not for Beginners — The Insurance Element — 
Cargo Lots — Quote by Cable — C. I. F. and E. 

XIV Selling on Ceedit • . 17i 

Foreign Same as Domestic — Letter of Credit 
— Remitting Direct — Proper References — Cash. 

Xy Bank Ceedit 18T 

Confirmed Credit— The Bank Charges — Drafts 
— Open Book and Merchandise Credits — Insur- 
ance — The Broker — Follow Instructions — ^Ma- 
rine Insurance — Every Detail. 

XVI American Expoet Houses . . . . . . . 198 

Choosing an Agent — Organization — Connections 
— Disadvantages — The Agent's Profit — Pay- 
ments — Joint Credit. 

XVII Teeeitoby and Agents ........ 211 

The Minimum Volume of Business — ^Reasona- 
ble Time — Percentage of Increase — Foreign 
Resident Agents — Local Advantages — Exclusive 
Agency — Brokers — Commission Houses. 



CONTENTS— Cotifwit^e^ 

CHAPTER PAGE 

XVIII ExpoETEKs, Importers and the Web3 Bill • . 223 
The Exporter — Specific Monthly Shipments — 
U. S. Exporters — Foreign Importing Houses — 
Indent Agents — Commissions — Combinations 
under the Webb Law — ^Webb Bill. 

XIX Traveling Salesmen — Codes and Cables . • 23S 
Foreign Languages — Qualifications — Foreign 
Branches — Cables and Codes — The Bentley 
Code — Consult Telegraph Companies — ^Applica- 
tion to Samples— Private Codes. 

XX Advertising . .1 . . . 251 

American Books for Export — ^Foreign Publica- 
tions, 

XXI Foreign Markets 255 

XXI] The Romance of Exporting 26^ 



THE A B C OF FOREIGN TRADE 



The A B C of Foreign Trade 

CHAPTER I 
The Export Business 

To a great many people in this country the 
export business is believed to be some kind of 
black or magic art, and the exporter himself 
an individual who, in a mysterious manner, ob- 
tains orders from foreign countries for goods 
manufactured in this country. There is a halo 
of mystery surrounding his operations — he 
seems to get his orders from nowhere in par- 
ticular or from places of which most people 
have never even heard. How he does it seems 
to be not only a secret, but apparently is the 
result of some acrobatic commercial stunts 
which result in a cable coming some fine day 
from the heart of Africa or the interior of In- 
dia ordering a shipment of merchandise. 
More mysterious still seems to be the fact that 
the order is generally followed by sufficient 
money to pay for the goods, which increases the 

1 



2 [A! B C 0¥ FOEEIGN TEADE 

belief that there is something quite exceptional 
in the export business. 

This country, as a whole, is new in the export 
field, at least on a large scale, and the average 
exporter has exploited to his own advantage 
the popular belief as expressed in the foregoing 
paragraph. He has found it easier to succeed 
in his export business if he could keep as manjr 
people as possible out of it, and he there- 
fore encouraged the idea of mystery and con- 
veyed the impression that he was the possessor 
of a special and valuable brand of knowledge 
which could be imparted only to those in the 
guild, never to an outsider, especially if the 
outsider happened to be a manufacturer. 

In this way until quite recently the ex- 
port business of the country, to a great extent, 
has been left in the hands of a comparatively 
few concerns, and many of them, especially the 
small export commission houses, have thought 
it best to encourage rather than discourage 
this popular misconception. Now the fact is, 
the export business is founded on exactly the 
same principles as any other legitimate busi- 
ness enterprise, and has to follow the same 
course if it is to be successful. 



THE EXPORT BUSINESS 3 

FOUB ESSENTIALS 

In order to build up a prosperous busi- 
ness in this country four things are absoluteljj 
necessary: quality, value, service and honor. 
These principles are as old as the world, and 
apply just as soundly to the foreign as they 
do to the domestic trade. The American man- 
ufacturer who wishes to develop an ever- 
growing organization knows that the whole 
secret of success depends upon his adhering 
to the four principles above enumerated, and 
that the only way to build up his business is 
through repeat orders. To do this the mer- 
chandise must be right in quality and up to 
sample. The price must meet competition. 
The service which the ultimate consumer gets 
through the manufacturer, agent, salesmen or 
vendor of the article must be of the highest 
quality, and his dealings honest and trust- 
worthy. Because of the fact that the foreign 
customer is doing business in distant lands, he 
must to a greater degree than a home customer 
rely on the integrity of the exporter. And for 
the same reason he requires a great amount 
and variety of service in connection with 



4 ^ B n OF FOREIGN TEADE 

the shipment of his merchandise. There is a 
certain technical commercial knowledge 
needed in addition to the knowledge usually 
demanded in the transaction of business in this 
country, but it is a knowledge that may easily 
he acquired. 

The various documents needed in foreign 
trade such as certificates of origin, consular 
invoices and the like seem unfamiliar and dif- 
ficult because they are used only in foreign 
trade, yet every domestic shipment made from 
a factory in New York to a customer in Louisi- 
ana demands certain documents and invoices, 
for which a special knowledge — ^how to make 
them up, and how to handle them — ^is also 
necessary. 

The country is now about to enter upon the 
most prosperous period of its history in for- 
eign trade. The war in Europe, fought by 
us for an ideal, will bring us a material 
harvest in many ways. American goods will 
be welcome everywhere — ^provided they are 
right. American trade will be encouraged—' 
provided it is offered on an honest basis. 
American manufacturers will be looked to foi! 



THE EXPORT BUSINESS 5 

the supply of many foreign markets — provided 
they give the service. The export trade of this 
country will grow tremendously, but to do so 
it will have to be governed by the same prin- 
ciples that have made American manufactur- 
ers successful and our country prosperous 
within her own borders. Let me say again 
that exporting is far from being a mystery, 
and that it is built on the rock-ribbed founda- 
tion of honesty, quality, price, service and 
efficiency. 

ABO 

Before you can run you must be able to 
walk. Before you can spell, you must learn 
your A B C's. These elementary truths ap- 
ply equally to the quest of all knowledge or 
to the acquirement of proficiency in any line. 
The title of this book, therefore, is to be taken 
literally. In it the author seeks to teach, step 
by step, the A B C of foreign trade to those 
who seek to learn. 

Contrary to popular opinion, it is not a diffi- 
cult subject to understand. Let the reader 
master the elementary principles herein set 
forth and he will have a sure foundation for a 



6 IK B C OF FOEEIGN TRADE 

compreliensive grasp of every phase of the 
export business. As in all other things, so in 
this, proficiency is acquired only by practice. 



THE A OF THE ALPHABET 

The simplest, in fact the customary way in 
which export business is handled is by mail, 
and on a cash F. O. B. basis. This is the logical 
and practical "A'' of the exporters' alphabet. 

Any method of getting business other than 
by mail; any quoting of prices other than 
F.O.B. ; any granting of terms other than cash, 
is an advanced step. As you will see there are 
other methods of obtaining business, of quot- 
ing terms, and of granting and collecting 
credits; but it must be just as clearly under- 
stood that such practices are no more intended 
for the beginner in the export field than they 
would be for the beginner in any other busi- 
ness- You should begin at the beginning in 
your export schooling. It can not be impressed 
upon you too often that you have to learn to 
walk before you try to run. You would not ex- 
pect for one minute, for example, to start a 



THE EXPORT BUSINESS 7 

new factory, or a new store, and right from 
the very first day, before you had become ac- 
quainted with factory costs, or with your over- 
head expenses, to quote prices for delivery any- 
where except at your factory or store* [You 
would quote only on a basis where you can 
determine exact costs and prices. Then, too, 
you would not put on salesmen during the first 
few months of your business, nor would you 
determine on a fixed policy as to whether to 
deal with jobbers and retailers or direct with 
the consumer, until you had built up the busi- 
ness to a certain degree and had acquired ex- 
perience enough to justify your adopting 
more costly methods of seeking business. 

The same applies to your credits. You would 
not and you should not grant credits in the 
beginning to any one you do not know. You 
must become acquainted with your customers, 
with the volume of business they offer you and 
can safely give you, and learn about their char- 
acter and credit standing before you lend them 
your capital, which is what you are doing when 
you extend them credit. 

After you have started the business, on a 
sound and safe basis, after you have had 



8 Ci^ B C OF FOEEIGN TEADE 

actual experience in costs of production and 
shipment, in policies and credit risks, you will 
advance to the next stage of quoting and deliv- 
ering otherwise than F.O.B. your factory, and 
in granting credits. 

All of this applies in exactly the same meas- 
ure to your foreign trade. Remember always 
that foreign trade is built up on the same prin- 
ciples and conducted very largely in the same 
manner as is business in this country. 

!A. DOMESTIC COMPAEISOlSr 

If you started a manufacturing business to- 
morrow in the State of New York, your first 
idea would be to get customers, and you would, 
doubtless, endeavor to get them at the least 
possible expense, that is to say, by mail. Later 
on, as the business develops and the profits 
warrant it, you will add salesmen ; you will ad- 
vertise ; you will appoint agents and distribu- 
tors; you will open branch houses; in short, 
you will gradually, but only step hy step^ de- 
velop your business and your methods. 

You will find business conditions in Okla- 
homa different from those in California, and 



THE EXPOET BUSINESS 9 

the goods you sell in Texas will not be the same 
as those you sell in Massachusetts. In the be- 
ginning you will try to develop business in a 
number of states or in all of them ; then as you 
go along, you will study the various states, and 
requirements of each, and if you discover that 
a slight modification of your article, or of the 
package which contains it, or something of 
that sort will increase your sales in a given 
territory you will try to overcome the obstacle, 
and in that way increase the sale of your 
product. 

Exactly the same principles and funda- 
mental facts apply to foreign trade. Be- 
fore you concentrate on any particular coun- 
try, before you increase your selling expense, 
before you advertise on a large scale, before 
you adopt a policy, or open branches, or ap- 
point agents, you will try the foreign business 
in all of them, subject, of course, to the adapta- 
bility of your product. Gradually as results 
come in and you become acquainted with the 
conditions, you will study each territory and 
build on exactly the same conservative and 
constructive lines as you would do in manag- 
ing your business in this country. 



10 IK B G OE FOREIGN TRADE 

Uust as you have to learn your [K B C in 
your home business you have to learn it in your 
export business, and in both cases you have to 
start with the letter *^A/' and advance from 
letter to letter, mastering one at a time, until 
you can spell any word in the language. 



how: to get okders 

The ''A" of ihe Export A B C, of course, 
indeed the *^A'' of any other business, is to get 
the order. This book will explain in a general 
way how to do this successfully in all foreign 
countries, without burdening you with statis- 
tics or other technical data which might 
confuse and discourage you. 

If you were to seek a comprehensive busi- 
ness market in this country for your commod- 
ity you would doubtless seek it in every state 
in the Union. You must apply exactly the same 
principle to your foreign trade. Make up your 
mind that you will sell your product in every 
country of the world, except^ of course^^ such 
countries where a sale of your product is an 
impossibility. For example, you would natur- 
ally not think of trying to find a market for 



THE EXPORT BUSINESS 11 

fur gloYes in the Congo or opera hats in 
Borneo. 

The best and quickest way to get the order 
is to go directly to the possible buyer and put 
^our line before him. This direct result is best 
reached through the help of the mails. 

iAs a matter of fact, irrespective of the many 
other methods of obtaining foreign trade out- 
lined in the following chapter, most of the 
business of even the biggest exporters to-day is 
done by mail. In very few cases has the Amer- 
ican shipper ever met his foreign client. Prac- 
tically all the business originates by mail, and 
most of it is conducted by mail ; therefore you 
will not be trying anything which has not been 
tried before, but on the contrary you will 
merely be adopting the method followed by 
practically all American shippers and ex- 
porters. 

TOUB LETTEE 

When you endeavor to sell goods by mail the 
letter you write acts as your salesman. Very 
much, therefore, depends upon the letter. 
Many a good sale is spoiled by too much sales- 



12 L^ B C OF FOREIGN TEADE 

mansliip; in other words, by too much talk. 
[Even now, doubtless, you are selling a certain 
percentage of your product by mail. If you 
will analyze your successful letter, you will find 
that it is the one which is most concise and to 
the point. It must say much and in a few 
words. 

Follow the same rule for your foreign sales 
letter, Don^t say so much that you will defeat 
your own purpose, but on the other hand don't 
say so little that you won't be convincing. 
[Eliminate all unnecessary argumentative sales 
talk, but give all the necessary details, point- 
ing out all the features in which the articles 
really excel. 

Remember that the man who gets this letter 
can not ring you up on the phone if he wishes 
some additional information or an explana- 
tion of anything which is not quite clear to 
him. It may take two weeks or it may 
take three months before your letter reaches 
its destination. Therefore, while eliminating 
all unnecessary diction, be sure to give all of 
the data that is really essential concerning 
your article. If your letter is incomplete your 
prospective customer may decide not to go 



THE EXPOET BUSINESS 13 

further into the matter, nor to trouble himself 
about it. If it has taken your letter two 
months to reach him and if it was not clear 
enough to enable him to do business, he can 
either write you or cable you for the additional 
data which he requires. If he writes you it will 
take two more months before you get his letter 
and if you should cable him in reply, which is 
expensive and not always satisfactory, four 
months will have elapsed since you wrote your 
first letter to him. 

If you do not cable him, but reply to his in- 
quiry again by letter, half a year will have 
gone by before he gets the data which he 
should have received six months before. Be- 
sides, if he cables you it means expense on his 
part which he may be reluctant to incur in 
connection with your offer. If the informa- 
tion which he requires can not convenientlj?; 
be cabled because of the expense, then yon 
have to write and it will take another two 
months before the prospective purchaser is in 
shape to do business with you. 

Such loss of time, in most cases, would prob- 
ably mean the loss of the order. Nowhere is 
the saying so true as it is in the export busi- 



14 IK B OF FOREIGN TRADE 

ness that "Time is money.'' It is a motto 
which you may well keep constantly in mind in 
connection with your foreign trade. 



iADDITIONAL DATA 

Oive your correspondent the following data, 
in addition to the necessary information as to 
weights, measurements, etc. (which are treated 
more fully hereafter in separate chapters). 

First — ^What your product is. 

Second — What your product will do. 

Third — ^Why it is a quality products 

Fourth — ^Why it is worth its price. 

Fifth — ^Why it excels over other products of 
the same kind. 

Sixth — ^What is your standard product. 

Seventh — Just how are you willing to change 
your standard product and what are you will- 
ing to manufacture to order and under what 
conditions. 

When you come to analyze these points yon 
will j5nd that they are exactly the same infor- 
mation that you would give your American 



THE EXPORT BUSINESS 15 

customer whether you write him or go to see 
him. 

As to the style of your letter, let it be busi- 
nesslike and to the point. Don't omit anything 
that is essential and don't add anything that is 
unnecessary. After you get into correspond- 
ence with your foreign prospect make your let- 
ters a little personal, and a little friendly. 
Foreigners are not accustomed to form letters 
and circular letters as are we. They are some- 
what sensitive and are apt to feel that a certain 
amount of friendly interest should be mani- 
fested toward them as buyers and clients and 
that a personal contact should be established 
between them and the man from whom they 
buy goods. Therefore, without sacrificing the 
business aspect of your letter, manifest a little 
friendly spirit in your reply to the first let- 
ter you receive after your first communication 
to the prospect. 

SIMPLE ESSENTIALS 

Don't be personal, however, in your first 
letter, which will go to all sorts of prospective 



16 :A B C of FOEEiaN TEADE 

customers, who do business in different coun- 
tries under different conditions. Your first 
letter should be precise, giving full informa- 
tion and inviting the recipient's reply, 
out of which you must try to develop your 
eventual business. Be sure that your letter 
soliciting export business has the necessary 
postage stamps on it. Foreigners are very 
touchy on this subject. It is most annoying 
to them to have to pay fines for insufiicient 
postage, and therefore the foreign postal rates 
ishould be carefully studied and rigidly ob- 
served. You will note on many letters which 
you receive from foreign countries that the 
sender has marked them ^^via Panama'' or 
^^via San Francisco" or by such and such a 
steamer. This is one of the things that our 
government makes unnecessary for us, as the 
Post Office Department always sends all mail 
by the shortest possible route and by the first 
connecting steamer. Therefore, you need not 
mark any such directions on your foreign mail. 



CHAPTEE II 

How TO Get in Touch: 

Export on a large scale in tMs country is 
a matter only of recent years. With very few 
exceptions it came to us originally by mail, 
and mostly unsolicited. A number of our 
nationally circulated publications can be 
found to-day in many foreign homes and 
in most of the clubs all over the world. 
The writer has read copies of the Saturday 
Evening Post^ Literary Digest^ System^ 
CoUier^s^ Leslie's, New York Times and 
other publications in the heart of Rhodesia, in 
British Africa, and in Shanghai, China, and 
elsewhere. A citizen of Cape Town may 
see your advertisement or description of your 
product in an American publication and 
may be interested enough to write you. 
One of his friends may have been over here, 
may have seen something which he thinks he 
would like to have, or to sell in his own coun- 

17 



18 !a: b c of. foreign trade 

try, and may write to tlie manufacturer. While 
tMs^ of course, is no longer the source of any 
considerable percentage of our vast export 
trade, there is no doubt that this is how it 
started and part of it will always continue to 
initiate in this very same manner. Therefore, 
as most of the export business of the country 
is obtained by mail you have exactly the same 
opportunity as had those who preceded you 
to gain a share of the great volume of world 
trade. Remember this : You can by mail reach 
every man, every day, in every part of the 
world, and at a nominal expense. You can not 
reach any considerable number of people in 
any other way, except at very considerable ex- 
pense. For example, suppose you wanted to 
bring your product to the personal attention 
of, say one hundred thousand people. Even 
if they were all in the same city, and you had 
to hire salesmen to interview them, or had to 
reach them by other methods, you would find 
the expense prohibitive as measured by the 
results. This would be even truer, of course, 
if the one hundred thousand people you wanted 
to reach were scattered all over the world. 
But through the mail you can reach them all 



HOW TO GET IN TOUCH 19 

simultaneously, the same day, and if neces- 
sary every day, for a few cents postage. 

IMEBICA IN FAVOE 

If you have something to sell that is meri- 
torious and priceworthy and if you will write 
about it to logical prospects abroad, incorpo- 
rating the points heretofore suggested, you will 
be sure to receive some very gratifying results. 
When you write, remember that you are com- 
peting with manufacturers who produce tbe 
same articles in other countries, in different 
parts of the world, but do not be afraid of this. 
There is competition for you in your own coun- 
try and there will be competition for you in the 
markets of the world. If you can meet com- 
petition at home, you need not fear competi- 
tion abroad. 

Remember also that there is going to be an 
ever-increasing demand for American goods. 
Don't forget there is such a thing as Fashion. 
The American woman thinks more of a French 
perfume, of a dress or hat bearing the label of a 
Paris dressmaker or milliner, or of an English 
traveling bag or of a piece of Italian silk than 
she does of the same articles made in this coun- 



20 [Ai B C OE FOEEIGN TEADE 

try, even if they be just as good. The French, 
English and Italian women, however, to bal- 
ance this, possess the same fondness for goods 
imported from other countries. 

America to-day is popular and, therefore, 
things American-made will be popular. Na- 
tions which never before were acquainted with 
the American, have come now to know him 
as he is. America stands for more to- 
day in world afeirs than she ever did 
before, and there is no doubt that this will 
reflect decidedly in favor of American mer- 
chandise. It is quite likely that American goods 
will be more fashionable abroad than other 
piported goods, and will be distributed in a 
greater number of foreign countries. As has 
been said already, there is nothing mysterious 
about the export business, and there is no rea- 
son in the world why you should not try to 
obtain your share of it. 

In sjDite of the enormous figures which have 
recently been published as the sum total of 
our export trade, the number of American 
manufacturers who are engaged in the busi- 
ness is comparatively small. 

The wonderful advantage of the export busi- 



HOW TO GET IN TOUCH 21 

ness is that it can be developed by the small 
as well as by the large manufacturer, and that 
the market is practically unlimited. 

As a nation we are relatively new in the field 
of export trade. Great Britain, Prance, Ger- 
many and other exporting countries were new 
in this business, also, at one time. Everything 
has to have its beginning, but after the begin- 
ning is made a success will follow from honest 
dealing, good value, persistent e:ffort, energetic 
work and intelligent handling. Of course, it 
needs effort and it requires a certain amount 
of expenditure, but you need the same things 
in your business in this country, if you are 
progressive and wish to expand your business. 

EXPENSE OF FOKEIGN BUSINESS 

The expense of initiating business in foreign 
markets is no greater than it would be to 
start a business in the domestic market. To 
develop any business anywhere costs money; 
how much money, depends on how much you 
have to spend or wish to spend, proportionate 
to the amount of your anticipated profit. 

Therefore, in any business your initial over- 



'22 a: B OF FOREIGN TRADE 

liead should be as small as possible, and the 
smallest overhead possible in the soliciting of 
business is in the use of the mails. The mails 
are the ^^A'' of the order-getting A B C in 
any business. 



TO WHOM TO SEND THE LETTER 

This is probably one of the points that will 
puzzle you most, but it is not really so difficult 
as it may seem. 

During recent world events, especially dur- 
ing the past year, you may have realized per- 
haps for the first time what a wonderful man 
your Uncle Sam is. He has created armies, 
equipped them, fed them, trained them and 
shipped them across the seas. He has created 
shipyards and built ships, erected factories and 
constructed aeroplanes. He has sold you Lib- 
erty Bonds in a more efficient manner and in 
greater volume than anything of the kind has 
ever been sold before either in this or in any 
other country. He has operated railroads, 
and he has done a thousand and one things 
that you perhaps never dreamed he would be 



HOW TO GET IN TOUCH 23 

able to do, as quickly and as wonderfully as he 
iias done. 

Now, as a matter of fact, your Uncle Sam 
had done some marvelous things long before 
the world war was started, that you possibly 
did not know about. You knew he handled 
your mail and you knew he collected the cus- 
toms, but there are a lot of things he did that 
you may never have been aware of. One of 
the institutions which you will find of tremen- 
dous value and assistance to you is the Bureau 
of Foreign and Domestic Commerce. This Bu- 
reau issues a publication known as Commerce 
Reports and these reports are the most inter- 
esting thing you can possibly read in connec- 
tion with your foreign trade. They contain 
actual reports from all consuls. They disclose 
opportunities, special openings, market condi- 
tions, market requirements ; in short, they are 
the finest and best literature that you can pos- 
sibly have access to on the subject. For the 
small sum of two dollars and a half a year you 
may receive these Commerce Reports and out- 
side of the actual daily consular and trade re- 
ports, all foreign inquiries which the Bureau 



24 :A: B OF FORBiaN TRADE 

receives are available to you. These foreign 
trade opportunities are described and num- 
bered in the Commerce Reports and the Bu- 
reau will on request furnish full information 
without, however, assuming any responsibility 
as to the financial standing of the foreign 
inquirer. 

The Bureau maintains the following ofl&ces 
in this country, any one of which will supply 
you with the data you are interested in, if you 
will apply for it: 

DISTRICT OFFICES 

Boston — 1801 Custom-house. 

Chicago — 504 Federal Bldg. 

New Orleans — 1020 Hibernia Bank Bldg. 

New York — 734 Custom-house* 

San Francisco — 307 Custom-house. 

Seattle— 848 Henry Bldg. 

St. Louis— 402 Third National Bank Bldg. 

COOPEEATIVE OFFICES 

Cincinnati — Chamber of Commerce. 
Cincinnati — Gen. Freight Agt. So. Ry., 96 
Ingalls Bldg. 

Cleveland — Chamber of Commerce. 
Dayton— Greater Dayton Association. 



HOW TO GET IN TOUCH 25 

Los Angeles — Chamber of Commerce. 
Philadelphia — Chamber of Commerce. 
Portland, Ore. — Chamber of Commerce. 

It is not advisable to write direct to our 
consuls, as they report regularly to the Bureau 
of Foreign and Domestic Commerce, and much 
information that you would try to obtain by 
mail is already in Washington and can be had 
by applying for it. Furthermore, the consul 
naturally can not give you all the information 
he gives the government, which is another rea- 
son why you should write direct to Washing- 
ton. 

Some of the export magazines will furnish 
you similarly with trade opportunities and 
also with lists of names and addresses of for- 
eign buyers of your product. These, in addi- 
tion to the information obtainable from the 
Bureau of Foreign and Domestic Commerce, 
constitute the most reliable sources for the be- 
ginner to use for this purpose. 

Then, of course, you can buy lists, but in 
doing so be careful to investigate and satisfy 
yourself first of all as to the responsibility of 
the individual or firm offering the lists. There 
are perfectly trustworthy firms engaged in 



26 :A B C OF FOREIGN TEADB 

tlie business of supplying lists, and it is im- 
portant to know that you are purchasing from 
one of them. If you make arrangements with 
an American export and foreign import house 
to handle your product exclusively in a certain 
country you will not have to solve this problem 
yourself, as they will attend to the mailing of 
your catalogues and quotations. 

Banks are beginning to take a great interest 
in the development of foreign trade, opening 
branches, collecting data, investigating credits, 
and getting acquainted with foreign business 
houses. Such banks will always be glad to 
give any information in their possession to 
their correspondents in your own city, and 
your own banker doubtless has some connec- 
tion with a New York bank^ for example, for 
collecting data on foreign trade. This is a very 
important and reliable source through which 
to obtain such information. 



CATALOGUES A:NrD FOLDERS 

Although your letter is to contain all the 
facts and full information concerning your 
product it is nevertheless advisable wherever 



HOW TO GET IN TOUCH 27 

possible to supplement your letter with an il- 
lustrated folder or catalogue. 

Unless your line is restricted to one or two 
items, it is only natural that you can not de- 
scribe in detail within the limits of a business 
letter every article you handle, with specifica- 
tions, prices, discounts, etc. Therefore, a 
folder is practically indispensable as a means 
of conveying fully the information required. 
However, do not send a folder without a letter 
accompanying it. The foreigner, as has been 
said before, is not used to being circularized, 
and the folder alone would not be sufficient, 
but let a well-written letter go forward with it, 
or in the same mail. 

Outside of the regular specifications, selling 
points and details which you have in your reg- 
ular folder for domestic purposes, there are 
other items which must not be omitted. Re- 
member that it will take many months for the 
folder to reach your foreign prospect and if he 
has not then all the information that he re- 
quires, your folder does not fulfill its purpose, 
and your customer may not feel it worth while 
to write you or to cable you for further par- 
ticularSj 



28 A B C OF FOEEIGN TEADE 

If lie is at all interested, such interest should 
Ibe encouraged and such information as he 
needs should be put before him at the time he 
receives your original offer. Therefore, he 
must know the price, of course. You do not 
print your prices and discounts on your do- 
mestic folder because you wish to learn first 
whether the inquiry or order comes from a 
jobber, a retail dealer, or a consumer. Here 
again, time is money, and so your price to the 
customer must be shown in your folder and also 
in your letter. In a later chapter you will 
see how to overcome the difficulty of quoting 
prices and discounts to a large variety of pros- 
pective customers, that is to say, a variety in 
their status as wholesalers, retailers or con- 
sumers. This difficulty must be overcome and 
can be overcome, but under no circumstances 
should you offer your product without quoting 
the price. 

WEIGHTS AND MEASURES 

The next important information which your 
foreign customer must have, is the data as to 
the weights and measurements of the packages 



HOW TO GET IN TOUCH 29 

in which your merchandise is boxed for export. 
This is of the greatest importance to him, for, 
as a matter of fact, the one thing he must know 
is what your article will cost him, not at your 
factory, but delivered at his store or ware- 
house. If you make shoes in Massachusetts, 
your customer in California pays not only the 
factory price, but he pays also the freight or 
express charges, whether you include them in 
the prices you quote him or whether he buys 
!P. O. B. factory. Whichever way be buys he 
pays the freight. The same thing applies, of 
course, to the foreign purchaser. Freight 
means both railroad and ocean freight. In 
order to calculate the ocean freight, which is 
the larger of the two freight items, he must 
know the measurements and weights of your 
product both boxed and unboxed; in other 
words, he must know the net, legal and gross 
weights respectively of your merchandise. 
Complete instructions as to the manner in 
which you are to quote these weights are con- 
tained in the chapter dealing therewith, but 
bear in mind that whatever you offer, whether 
by folder, catalogue, or letter, add the infor- 



130 A B C m iFDREiaN TKADH 

mation as to weigMs and measurements if you 
wish, to save time and get quicker results. 
Therefore, these four items — prices, dis- 
counts, weights and measurements ^— are 
essential to your catalogue, and as your 
catalogue and your letter are your two sales- 
men, make them both as effective and con- 
vincing as possible. 



CHAPTER III 

YouK Peoducts and Prices 

When you introduce your products, intro- 
duce them exactly as they are. In order to en- 
courage business it is quite proper to say that 
you are going to make changes if the volume of 
the business demanding such changes warrants 
your making them, but do not anticipate these 
changes in describing your product. The ideal 
to attain is the maximum volume of business 
on the smallest possible variety of merchan- 
dise. Standardizing your product means stand- 
ardizing your manufacture, and standardized 
manufacture means economical quantity pro- 
duction and lower prices. Hence you natural- 
ly will strive for this goal. 

FRANKN'ESS AND ACCURACY 

On the other hand, certain changes may have 
to be made in order to meet certain market 
conditions. You can not know and will not 

31 



32 A B C OF FOEEIGN TRADE 

know what these market conditions are or what 
changes are required until you hear from the 
various markets of the world. Don't study 
statistics, market conditions, peculiarities 
of customs or requirements in the beginning. 
Offer your merchandise as it is, in all countries 
where you can logically expect to find a market 
for it. To standardize your product you must 
conform as much as possible to your home re- 
quirements. Therefore do not encourage 
changes. Be frank to state that you will only 
make changes if the volume of business is large 
enough to justify the expenditure, because no 
material change can be made without ex- 
pense or additional capital investment. If any 
additional expense is to be added to the cost of 
the product for such changes, say so. And 
remember what has been reiterated so often in 
this book, that you should say all you have to 
say on the subject in your first offer. If your 
American trade demanded changes and if the 
business warranted them, you would naturally 
be willing to make them, so once more jon are 
to apply the same ideas and methods to your 
export trade which you would apply to your 
American business. For example, a manu- 



^ YOUR PRODUCTS AND PRICES 33 

f acturer of electric lamps for a current of 110 
volts has to add a line of 220-volt lamps for 
that part of the country where a 220-volt cur- 
rent is used. A saddler who manufactures 
riding saddles for New York's ^*Four Hun- 
dred," and who wants to do business in Texas, 
has to make saddles of the Texas type if he 
wishes to cater to the cowboys' business. In like 
manner there are certain things which have to 
be made differently for different foreign coun- 
tries. As all street traf&c in England and 
Australia drives on the left side of the street, 
automobiles shipped to those fiountries must 
have the steering wheels on the right-hand side 
instead of on the left, as we have them in this 
country. The automobile manufacturer can 
not afford to make this change on his car ex- 
cept under one of two conditions, viz.^ if he is 
paid extra for it, getting the actual cost of the 
extra expense involved so that it means no 
loss to him, or by getting business in such 
volume that he can afford to make the change 
without an extra charge. You can do the same 
thing, and you should state so frankly. 

If you print a new folder or catalogue be 
sure you describe goods which you know you 
will be able to supply four to six months later. 



34 ^ B OE FOREiaN TEADE 1 

! 

Remember that you will get the order ' 
four months later, and that the customer 
will be expecting just what you offered, and 
not something different which you may be 
making at the time you receive the order. In 
other words^ eliminate articles which are con- 
trolled by fashion, or subject to frequent 
changes, and offer only goods which you are 
practically sure to have as per specifications 
submitted, when the orders will reach you. 

PRICES AND DISCOUNTS 

The question is often raised whether the 
manufacturer should charge a higher price for 
his goods for export than for the domestic 
market. Of course, the higher price means a 
larger profit, but it is for this very reason 
that you should adhere to the prices and prof- 
its with which you are satisfied in this coun- 
try. Your goods are advertised at a certain 
price or quoted at that price in this country, 
and the foreign buyer will probably become 
acquainted with such price either through an 
American publication or otherwise. We do 
not yet seem to appreciate in this country that 



.TOUR PRODUCTS AND PRICES 35 

the foreign buyer is entitled to exactly the 
same consideration, the same price, and the 
same service as is the American purchaser. A 
customer is a customer, whether he resides in 
Chicago, Hongkong, or Honolulu. He buys 
your merchandise and helps you to increase 
your output, your turnover and your profit. 
In many instances you may be able to get 
av^ay with a higher price, but here, again, your 
foreign trade is the same as your domestic; 
you may get away vdth it once, but generally 
you get away with it only once. 

You know from your own experience that 
the first order is the most expensive and the 
most difficult to get. If you handle the first 
order right, and if you give the right service, 
you will usually get ^^ repeat orders,'' and it is 
the repeat business that means big volume and 
large profits in the long run. If any one were 
to tell you this for the purpose of teaching 
you how to run your home business, you would 
consider it quite gratuitous because you know 
it as well as your teacher, and your most hum- 
ble clerk knows it, too. You may not think it 
applies to your foreign business but it does 
nevertheless. Honorable, straightforward, 



36 'A B C OF FOEEiaX TEADE 

trustwortlijT^ dealings, backed by the right mer- 
cbandise, sold at the right price and coupled 
with the right kind of service^ will build up| 
your export business successfully just as it 
will build up your home business successfully. 
But as sure as you would fail in this country 
if you did not adhere to these principles, just 
as surely will you fail in foreign markets if 
you neglect them. It is necessary to reiterate 
this so often because of the fact that many 
American manufacturers do not realize the 
importance of this very simple fundamental 
proposition. 

YOUK AMERICAN- PEICES 

To come back to the subject of price, you 
should, therefore, quote the same prices abroad 
that you quote in this country. Not only will 
it simplify matters, standardize your business 
and form a natural extension of your Amer- 
ican trade, but in addition it will put you in 
right with your foreign customer. Once the 
customer becomes interested in your product 
to an extent that will cause him to buy any 
considerable quantities of it, he will be sure 
to check you up from some source in order to 



YOUR PRODUCTS AND PRICES 37 

convince himself that he is not paying more 
F. O. B. your factory than your domestic cus- 
tomer pays for equivalent quantities. 

Wouldn't you, in fact, do the same thing? 
If you had a lathe or a drilling machine to 
buy for your factory, or your sales depart- 
ment were to order fifty thousand catalogues, 
would you not check up the price from at 
least two or three dealers in machinery, or two 
or three printers? The foreign buyer does 
exactly the same thing, but where you can 
only check up the prices of two or three print- 
ers in your town, the foreign buyer can and 
will check up the prices of all the manufac- 
turers making a product similar to yours, in 
different countries of the world. The best 
policy to pursue is to base your business al- 
ways on right prices, and your American 
price is, usually, the right price. It represents 
the cost of your product to you, plus your 
overhead, plus your legitimate profit, which in 
turn is regulated usually by wholesome compe- 
tition. That is all you expect to get from your 
■American customer, so why exact more from a 
customer simply because he lives in another 
part of the world? 



38 A B C OF FOREIGN TEADE 

WHOLESALER^ EETAILER AND COISTSUMER 

You probably differentiate at home between 
wholesalers, retailers and consumers. You 
quote prices in accordance with their status. 
The wholesaler gets a better price than the 
retailer, and the retailer gets a better price 
than the consumer. You can do that readily in 
this country because you know or you can 
easily find out to what class your customer or 
prospective customer belongs. However, you 
can not readily do this in your foreign busi- 
ness. At least you can not do it in the begin- 
ning when you approach for the first time a 
a large number of prospective buyers with 
whose status you are not acquainted. 

Let us analyze what the difference in price 
means as quoted by you to various classes of 
your American customers. The difference in 
price in the first place is granted so as to 
enable the jobber to make a profit when sell- 
ing to the retailer, the retailer to make a 
profit when selling to the consumer, and you 
to make a profit on all of them. The princi- 
ple, however, which really guides you and 
which really establishes the status of your cus- 



YOUE PRODUCTS AND PRICES 39 

tomer is this: You are willing to make a 
smaller profit on a larger order. Ten per cent, 
on an arder amounting to one hundred dollars 
is the equivalent of only five per cent, on an 
order for two hundred dollars, and less on an 
order for more than two hundred dollars. In 
other words, the quantity of the goods sold is 
the determining factor as to the price you 
quote, because it determines your profit. The 
larger the order the smaller your percentage 
of profit, but the larger naturally is the total 
net profit. 

The wholesaler is the quantity buyer, and it 
is to the wholesaler precisely in his capacity 
of quantity buyer that you quote your lowest 
prices. In other words, you give your best 
prices to the man who buys in the largest 
•quantities. 

The word ^^ retail" is defined by Webster 
to mean ^^to sell in small quantities; to sell 
directly to the consumer.'' The retailer, 
therefore, buys in lesser quantities than the 
wholesaler, and pays a higher price, giving 
you a higher percentage of profit. 

The consumer is the man who buys one, or 
two, or at most only a few articles at a time. 



40 IK B C OE FOEEIGN TEADE 

While your profit on the purchase of the con- 
sumer if you sell direct to him is the largest, it 
AS, in its totality, smaller than the rest. 

To sum up, therefore, for the reasons stated 
you give a better price to the wholesaler than 
you do to the retailer, and a better price to 
the retailer than you do to the consumer. 

To express this difference of price between 
the various classes of your customers you 
quote your discounts accordingly. The larger 
the discount, the lower your price to the 
buyer. The lower your price to buyer, the 
smaller your profit. Your list price means 
nothing to the buyer, the only thing that means 
anything to him is the net price that he pays 
for the goods, after the discount is deducted. 
iYour net price is lower to the wholesaler than 
to the retailer. The consumer gets no dis- 
count. The price to the consumer is, or should 
be, your list price. 

QUANTITIES AND DISCOUNTS 

All this is, of course, very simple. But these 
details have been stated for the purpose of 
giving you a clearer understanding of what 



YOUR PRODUCTS AND PRICES 41 

is to follow, viz.: Quantities determine dis- 
counts, and discounts determine prices. If 
you knew the quantity your customer intends 
to buy you would know into what class of 
buyers he belongs and what discount to quote 
him. Therefore, you eliminate all these diffi- 
culties by quoting discounts on a sliding scale, 
depending upon the quantity ordered. 

To determine the discounts of manufactured 
articles, take as a basis the discount to which 
the biggest wholesaler in this country is 
entitled and quote this to your foreign pros- 
pect on quantities equal to the quantity which 
the American wholesaler usually purchases. 
Then the rest of your discounts are scaled 
down in proportion to the quantities bought. 
For example, a manufacturer of automobiles 
lists his car in this country at fifteen hundred 
dollars net, F. O. B. factory. This is the price 
which the consumer pays. When you buy an 
automobile from the local dealer, he charges 
this F. O. B. factory price, plus freight from 
the factory to your city. 

The manufacturer grants his distributors 
a discount of 25% with a bonus of an extra 
5% if a certain minimum sale has been reached 



42 A B C OF FOEEIGN TEADE 

by the distributor at the end of each year. The 
distributor appoints agents, quoting them 5% 
less than he gets himself, or, in other words, 
20% and a bonus of 5% if they reach a 
certain minimum sale each year which is 
determined by the importance of their ter- 
ritory. The agent appoints sub-agents and 
salesmen on the basis of a 15%, 10% and 5% 
commission and the car thus eventually reaches 
the consumer at the manufacturer's list price 
as quoted by him P. O. B. factory, each selling 
agency receiving its discount in proportion to 
the quantity of its individual sales. In this 
way the distributor gets more than the agents ; 
the agent more than the sub-agents; and the 
sub-agent more than the local salesman. 

Assuming that the manufacturer requires a 
distributor to sell 500 cars in his territory in 
order to get a discount of 25 and 5%, and at 
least 100 cars to get 25% straight, then if he is 
selling this same automobile abroad he should 
quote to his foreign clients the following scale : 

500 cars or more, 25 and 5%* 
Prom 100 to 499 cars, 25% 
From 50 to 99 cars, 221/2% 
From 10 to 49 cars, 20% 



.YOUR PRODUCTS AND PRICES 43 

From 5 to 9 cars, 171/^% 
2, 3, or 4 cars, 15% 
1 car, net. 

The quantity purchased determines the sta- 
tus of the buyer and therefore the discount to 
which he is entitled. If he says he is a whole- 
saler he must buy in w^holesale quantities to 
receive the highest discount. 

Pie may not buy quantities from the start, 
nor get the highest discount from the start. 
However, to give him an opportunity to prove 
that he means business, and to develop into a 
quantity buyer, tell him in your export cata- 
logue, letter and folder, that the discount he 
will eventually receive will be determined at 
the end of each year, according to quantity, 
thereby making the extra discount retroactive. 
But settle with him meanwhile strictly accord- 
ing to your established scale, otherwise you 
will be imposed upon in a great many in- 
stances by foreign individuals who will ask you 
for a sample car (or other product) at the 
highest discount, without any intention what- 
soever of making any further purchases. If 
he buys only one car, let him pay the full price 



44 :A; B C OF FOREIGN TRADE 

without discount. When he buys four more, 
bringing his total purchases up to five cars, 
give him 17^% on these four, and credit him 
with 17^% on the first car for which he paid 
net cash. "When his purchases amount to 
more than 10 cars, allow him 20% on all pur- 
chases from then on up to 49 cars, and credit 
him with an extra 2%% retroactive on all his 
previous settlements. In this way, he quali- 
fies gradually and equitably for the highest 
discounts allowed according to quantities pur- 
chased. You will recognize that this is fair 
both to him and to you. The foreign buyer 
is entitled to and thus receives the best dis- 
counts which you are willing to allow to Amer- 
ican purchasers for equivalent quantities. 

ANOTHER SAMPLE 

In the same manner, to quote another exam- 
ple, a manufacturer of an article listed at 
$2.50 net quotes the following export dis- 
counts: 

1 to 10 accessories, 15 % 
11 to 25 accessories, 17%% 



YOUE PRODUCTS AND PRICES 4J 

26 to 50 accessories, 20 % 

51 to' 100 accessories, 22^/^% 

100 and over accessories, 25 % 

A manufacturer o£ an advertising novelty 
listed at $6.00 net P. O. B. factory quotes the 
following discounts which are in accordance 
with his home trade based on purchases by the 
dozen: 

1 Dozen, 20%' 

2 to 4 Dozen, 221^%' 
5 to 9 Dozen, 25% 

10 to 24 Dozen, 33 1-3%' 
25 to 49 Dozen, 40% 
50 Dozen and over, 50% 

Tou will receive letters from time to time in 
which the customer informs you that he will 
not do business unless he gets a discount of 
40%. Some manufacturers have yielded to 
this foreign pressure by artificially increasing 
their sales price and then allowing 40%, 
which, however, may really only amount to 
10% off the regular American price. This is 
a mistaken policy, of course, as it will only 
mean difficulty and dissatisfaction later on. 



4^ 'A B C OF FOEEIGN TEADE 

A casli discount is not nsual in foreign trade, 
therefore its equivalent should be considered 
when figuring out one's discount scale. Such 
schedules or discount scales can easily be ap- 
plied to any line of merchandise. They elim- 
inate all difficulties with regard to determining 
individual discounts, and place every customer 
automatically on a just and relatively equal 
basis. 

A SQUAEE DEAL 

After all, as has been said before, the world 
is a small place. The buyer from Chattanooga 
and the merchant from Denver are quite likely 
to meet on a buying trip at the Waldorf in 
New York. The man from China may meet 
your customer from Cape Town at the Troca- 
dero restaurant in London, at the Cafe de 
OParis in Paris, at the Biltmore in New York, 
or at the Palace in San Francisco. "When they 
do meet they will discuss prices and discounts. 
The minds of merchants all over the world, re- 
gardless of country or nationality, are consti- 
tuted pretty much the same way ; they want to 
get a square deal, the same deal the other fel- 
low gets who is in the same class. 



YOUR PRODUCTS AND PRICES 47 

America will become more and more an ex- 
port market and as such will be visited more 
and more by foreign buyers. In London or 
Paris you can meet merchants from any part 
of the world at almost any time. And just as 
it is natural for you to find tobacco buyers in 
iVirginia and lumber buyers in Oregon, so you 
will find that foreign merchants who import 
American merchandise will eventually come 
to America. Therefore, apx)ly the same prin- 
ciples to your foreign trade, quote the same 
prices and the same discounts as you do in 
this country, adhere to them, show no one any 
special favors, give them all the same kind of 
deal and they won't ^^ knock'' you or scratch 
you off the list when they get together and 
compare notes. 



CHiAPTER IV 

Change of Prices 

It goes without saying that prices change 
frequently, especially in these days, and when 
your customer receives your quotations two 
months after you have mailed them and you 
receive his order two months after that, it is 
quite probable that your prices may have 
changed in the meantime. But the customer 
knows that just as well as you do, and is pre- 
pared for it. In all probability he will know 
what the market value of the article was at 
the time you made the offer, two months pre- 
.viously (assuming that it takes two months to 
reach this particular customer). If your 
price was fair then and if your discounts are 
satisfactory, he will reason that your price 
must or should be fair now. He knows gen- 
erally whether your particular commodity has 
gone up in price or has been reduced. He will 
Judge the article by the price you quote him in 
comparison with the market values then exist- 

48 



CHANGE OF PRICES 49 

ing, and for that reason again it is advisable, 
as explained before, to use actual American 
market prices as the basis for your quotations. 
He will place his order with you, generally on 
the understanding that you are to fill it at the 
best American market price current at the 
time you receive his order, but of course the 
discount must always remain the same. 

WITHOUT NOTICE 

For your own protection, and for that of 
your customer, and in order to avoid any pos- 
sible misunderstanding, it is well for you to 
state in your letter, folder or catalogue, that 
your prices are subject to change without no- 
tice. Explain that the prices submitted by 
you are those prevailing at the time of your 
making the offer, or issuing your catalogue. If 
you do not anticipate any important changes 
in the immediate future say so, just as you 
ought to say frankly what changes you do ex- 
pect, if you have reason to anticipate any. The 
customer doubtless understands that under 
present conditions, when the cost of labor and 
materials may go up or down any day, it 



50 m iBI Q :0E FOREIGN TEADE 

is impossible for any manufacturer to guar- 
antee prices for any extended period. Make 
it clear, therefore, to the customer, that while 
he will have to pay a higher price if prices 
have risen by the time you receive his order, 
he will, on the other hand, get the benefit of 
any reduction if prices have declined. 

Again bear in mind the reduction or in- 
crease of your list prices has nothing to do with 
the discount, which should always remain the 
same. 

Do not argue too much about the price. 
Name your price definitely, state your dis- 
counts, and let that end the matter. It will not 
pay you, especially in the beginning, to at- 
tempt to compare your prices with those of a 
competitor. If the prices you quote are your 
American list prices, which no doubt you fixed 
after mature consideration and comparison 
with competition at home, and if they embody 
a legitimate profit for you, all the study in the 
world won't be of any material value to you. 

There are three grades of merchandise : high 
priced, medium priced, and cheap. You are 
the maker of either one, two, or all of these. 
There are buyers for all of these grades. 



CHANGE OF PRICES 51 

Even if you had tlie facilities to com- 
pare your prices with prices of the same goods 
made in England or Prance, this knowledge 
would not be of any value to you unless you 
also knew the difference in freight rates. After 
all, unless you forego your profit, you can only 
sell your merchandise at your established best 
price. Therefore, the best thing to do 
is to state your lowest price, state your 
discount, and let the customer decide — for, 
after all, it is with him that the decision 
rests. If your quality and your prices 
are right you will get the business, and if you 
handle the first order right, you will get re- 
orders. Also bear in mind that foreign mar- 
kets are quite willing to pay high prices for 
high quality merchandise, so whichever way 
you look at it, whether you manufacture a 
high, medium or cheaply priced article, your 
opportunities of getting the business are ak 
ways there, provided the price is justified by 
the quality. 

WEIGHTS AND MEASUEES 

If a pair of boots costs $3.50 net F. 0. B. 
Boston, this does not represent the actual cost 



52 [A; B C OF FOEEIGN TRADE 

of the boots to a buyer, for example, in Mel- 
bourne, Australia, as lie must add to this the 
freight, insurance and other charges. In other 
words, the only information that is of any 
definite value to him, is the cost of the shoes 
landed in Melbourne. 

It is necessary to know the weights and 
measurements of the cases containing the mer- 
•chandise in order to calculate the freight. For 
ihis reason give the foreign prospect in your 
letters, folders and catalogues all the essential 
information, so he may figure his landed cost. 
For example, an automobile manufacturer 
should state what his car weighs boxed and 
unboxed, and what it measures boxed ; that is, 
give the measurements of the box, which, let 
us say, would be 13 ft. by 6 ft. 2 in., by 4 ft. 
2 in. These measurements should be given 
both in feet and in meters. In the chapters on 
freight and packing you will observe that it 
is most essential to pack your goods as com- 
pactly, securely and economically as possible. 

F. O. B. AND C. I. F. 

The preceding chapters have shown you 
how to get your order by mail; to whom to 



CELANGE OF PEICES 53 

write; how to write; wliat information you 
must give when quoting prices or submitting 
catalogues; how to quote; what discounts to 
allow; and what data to include in addition to 
that which you supply regularly to your Amer- 
ican customers. There is, however, one more 
point to be mentioned concerning quotations. 
In the beginning and until you acquire the 
necessary experience, you should always quote 
your prices F. O, B. factory or F. O. B. 
steamer. Remember this is the A B C of ex- 
port, and you are only now at the letter ^^A." 
There is, of course, an advantage in quoting 
your merchandise C. I. F., that is to say, to 
quote it landed in the country of its final des- 
tination. The ^rC^' in C. I. F. stands for Cost, 
which means the invoice value of your mer- 
chandise as billed to your customer. The ^^I'^ 
stands for Insurance, and your quotation would 
include the marine and war risk insurance. 
The *^F'' stands for Freight. To do this you 
have to know a great deal more about freights, 
insurance rates, handling and other incidental 
charges, than you will know at the outset. 
iYou will therefore have to be more advanced 
in your ^^ alphabet'' before you come to these 



1/ 



54 [A: B OF POEEIGN TEADE 

more intricate, and at this time not absolutely 
essential items. Freight rates are so fluctu- 
ating, so unstable, and so uncertain; freight 
space so hard to get, and so little available that 
it is not only inadvisable but practically im- 
possible for you at this time, when sending 
your foreign sales letters, to quote your mer- 
chandise ^ landed'' in foreign countries. Your 
quotations would be valueless when they^ 
reached your prospect. You will be told that 
quoting F.O.B. prices is a handicap to you, 
but as a matter of fact, it is a much greater 
handicap to you to quote C. I. F. prices if you 
can not live up to them. 

If a prospective customer cables you for 
C. I. F. quotations, see first if you can obtain a 
freight quotation and firm offer of space for 
the goods which he proposes to buy, then you 
may cable a C. I. F. quotation with the provi- 
sion that he accept your offer immediately by 
return cable. But this is quite improbable 
and, as a matter of fact, most unlikely to 
happen to you in the beginning of your export 
experience, as it is usually done only in connec- 
tion with bulk or staple goods, or quantity 
purchase of manufactured products. Your for- 
eign customer usually does not know your ar- 



CHANGE OF PRICES 55 

tide well enough, unless it is a staple, to order 
in quantities sufficient to warrant his cabling 
for quotations, and is quite willing in the 
beginning to buy on an F. O. B. basis. 

*^F. O. B. factory '' means free on board rail- 
road cars at your factory. ^*F. O. B. steamer'' 
means free on board steamer. This is worth 
while noting, because F. O. B. steamer does not 
mean that you deliver the goods alongside the 
steamer, or on the dock where the steamer 
loads, or in the port from which the steamer 
sails, but free on hoard the steamer. In most 
cases merchandise shipped from an inland 
point to New York, for example, has to be 
hauled by team or truck to the steamer's dock. 
Then, it has to be put on board. F. A. S. 
means free alongside the steamer. 

^*Free at destination" stands for free deliv- 
ery in the buyer's town, and this you should 
never quote unless you are acquainted with the 
costs of such an undertaking. C. I. F., as 
already explained, means the cost of the mer- 
chandise, plus the insurance and plus the 
freight. It means free on board the vessel in 
the foreign port to which you are shipping. It 
does not include unloading, lighterage, customs 
dues, stamps, quay or dock charges, hauling, 



56 :A; B C OF FOEEIGN TRADE 

and incidental expenses at destination^ etc., all 
of wMch are included in a ^^free at destina- 
tion'' quotation. As a matter of fact, it would 
never pay you, and what is more important, 
it would never pay your customer to have you 
quote ^^free at destination'' even if you were 
willing to quote that way. It stands to reason 
that the foreign buyer can arrange in his own 
country for better terms of labor and of haul- 
ing than you can. If you ship a pump to a 
man in Jacksonville, Florida, he can get a bet- 
ter rate from the local express man to take that 
pump from the station to his store than you 
can by trying to arrange it from a distance. 
The local expressman is sure to charge you 
more that he would charge the local storekeep- 
er, who is not only acquainted with local con- 
ditions and local rates, but probably a regular 
patron of the drayman, and therefore getting 
closer rates than you possibly could. The same 
thing applies whether the hauling and trans- 
portation are done in Bombay, India, or in 
Jacksonville, Florida. 

C. F. means cost and freight only — ^the 
buyer arranging for his own insurance. 

C. I. F. & E. means cost, insurance, 
freight and exchange. This is used in some of 



CHANGE OF PEICES 57 

the British Colonies, when exchange is in- 
cluded in the quotation, as you will see in the 
chapter dealing with exchange. 

To resume, quote F. O. B. factory, or if nec- 
essary, quote F, O. B. steamer. This is some- 
thing you can easily do. You can always 
ascertain the railroad freight rates for your 
goods to the port of shipment. You should 
use the latter form if you are located, say, in 
the heart of Illinois. The customer probably 
does not know exactly where that is, and he 
certainly has no means of learning what it will 
cost to carry the merchandise from your fac- 
tory to the steamer/ 

In any event do not quote 0. I. F. in extror 
ordinary times, nor under unstable conditions, 
nor until you have the necessary experience. 
It may be advisable for you to do so when 
international trade and shipping conditions 
are restored to a normal basis and when you 
have acquired the necessary knowledge, but 
certainly not in the beginning of your export 
business. Of course, a C. I. F. quotation ap- 
peals strongly to the buyer, because you are 
taking the risk, not he, but you should not take 
such risks until you are well qualified to do so. 



CHAPTER V 

Files and Follow-up Letters 

Let us assume that your foreign sales letter 
is now in the mail, together with your cata- 
logue or folder, and that they contain all the 
data which you have been advised in the pre- 
ceding chapters to include in them. Naturally 
a certain time must elapse before you will get 
any results. Just as naturally you will not get 
a reply to every one of the letters any more 
than you would get such results in this country 
from a similar sales campaign. If, however, 
your letter will bring you a fair percentage 
of returns in the way of new foreign clients 
and accounts you will be amply repaid for your 
trouble and expense. In this connection it will 
probably help you and often lead to actual 
business if you will add at the bottom of your 
folder or letters a statement requesting the re- 
cipient, if he is not interested in your line, to 
be good enough to bring it to the attention of a 
fellow-merchant in his city who may be inter- 

58 



FILES AND LETTERS 59 

ested. This he will generally be glad to do. 
In foreign countries an enormous amount of 
business is still done at the club over the din- 
ner table, or at tiffin (the English colonial 
expression for lunch). Merchants in out-of- 
the-way places are more congenial, more inti- 
mately acquainted, more friendly, and possess 
less of our harsh competitive spirit, because 
there are in many cases only a few of them in 
the strange country, all jointly and individu- 
ally striving to develop its trade. Therefore, 
if one of them can help a fellow-merchant by 
pointing out a line which may be of interest to 
him, he will generally be glad to do so. 

While your letters are working as your ^'si- 
lent salesmen,'^ and are in the mail en route to 
their various destinations, you can profitably 
arrange for a filing system. Each manufac- 
turer usually has his own system of filing, but 
the author would recommend that foreign mail 
be filed not by names, but by countries. In this 
way you really file according to markets, which 
is the logical way, particularly when you pro- 
gress in the business and begin to study the 
different markets. 



60 ABC OF FOREIGN TRADE 

COUNTRIES AND SUBDIVISIONS 

It would be exactly the same thing if you 
would file your correspondence under the 
various states. Then under these headings 
you can divide the files again into cities, 
and under the cities file your letters 
alphabetically. This is most important. Sup- 
pose, for example, that you are advised by the 
Bureau of Foreign and Domestic Commerce, 
or any other reliable source, that there is a spe- 
cial demand for your line of merchandise in a 
certain country. You can then immediately 
review all correspondence which you have had 
with firms in that particular country, send 
them a special letter or bulletin on the subject, 
and thereby stimulate that particular market 
in a manner which you could not do if all your 
letters were simply filed alphabetically, re- 
gardless of countries. 

The following classification will probably 
meet your requirements : 

Africa Arabia 

(Subdivided into North, West, 

East and South Africa) Argentine 

Algiers 



FILES AND LETTERS 



61 



Australia 


Ecuador 


(Subdivided into W. Austra- 


Egypt 


lia, S. Australia and "Aus- 


tralia, general") 


England 


Azores 


(Subdivided into England, 


Scotland, Ireland and 


Bahama Islands 


Wales) 


Barbados 


Fiji Islands 


Belgian Colonies 


Finland 


Belgium 


French Guiana 


Bermuda 


French Indo-China 


Bolivia 


Gibraltar 


Borneo 


Greece 


Brazil 


Guadeloupe 


British Guiana 


Guatemala 


British West Indies 


Guam 


Canada 


Haiti 


Canary Islands 


Hawaiian Islands 


Celebes 


Holland 


Central America 


Honduras 


Ceylon 


Iceland 


Curacao 


India 


Cyprus 


Italy 


Denmark 


Jamaica 


Dominican Republic 


Japan 


Dutch East Indies 


Java 


Dutch Guiana 


Madagascar 



62 ^ B C OM FOREIGN TRADE 



Madeira 

Malta 

Manchuria 

Martinique 

Mauritius 

Mexico 

Morocco 

New Caledonia 

Newfoundland 

New Zealand 

Nicaragua 

Norway 

Nova Scotia 

Panama 

(Including CanaJ Zone) 

Paraguay 
Peru 

Philippines 
Porto Rico 
Portugal 



Roumania 

Russia 

Salvador, 

Siam 

Siberia 

Sicily 

Spain 

Straits Settlements 

Sumatra 

Sweden 

Switzerland 

Tasmania 

Trinidad 

Turkey 

IJruguay 

Venezuela 

Virgin Islands 

Miscellaneous 



You will find that this classification will 
probably meet your needs, but you may mod- 
ify or enlarge it as your business requires. 



FILES AND LETTERS 63 

EXTRA CARBOISr COPIES 

You are doubtless acquainted in your 
home business with the follow-up system, by 
which means you write to your correspondent 
again if after a certain date he has not replied 
to your last letter. Like all other progressive 
methods, this should also be adopted in your 
export business. However, the follow-up 
in the export business has another and even 
more important significance. Even in times of 
peace a thousand hazards beset your letters. 
Ships get lost at sea ; mail gets saturated with 
sea- water; a bag containing the mail may be 
dropped by a coolie when taking it off the 
steamer ; it may be destroyed by fire ; the letter- 
carrier in the foreign country may lose it; 
storms, typhoons, icebergs, or other acts of 
Providence may divert or destroy your mes- 
sage before it can reach its destination. If 
your client does not get your first communica- 
tion, then your ordinary follow-up, requesting 
him to reply would be of no value whatsoever. 
Therefore^ for foreign business you should al- 
ways make an extra carbon copy of your letter 
to be used as a follow-up. The sheets to be 



64 A B C OF FOREIGN TEADE 

used for this purpose should be printed just 
like your regular letter-head, but marked 
^^ follow-up'' in some conspicuous place. The 
paper should be very thin. This copy should 
be mailed in your next letter to the same cus- 
tomer, whether it is a regular follow-up letter 
or written for any other reason. Thus, when- 
ever he gets a new letter from you he gets also 
a copy of the letter next preceding, regardless 
as to whether your new letter has any connec- 
tion with the subject of the previous one. In 
this way, your correspondent will always re- 
ceive a copy of the mail that went to him by the 
previous steamer, and thus remedy any loss or 
accident which may have befallen the original 
letter. 

The next thing to have is a card system. This 
must be left largely to your own ideas and 
should conform to present-day business meth- 
ods. Here, as in the case of your letter files, it 
is advisable to arrange the cards according to 
countries, subdividing the latter to suit your 
requirements. You may either keep an index 
merely of the names and addresses of your cus- 
tomers, or you may enter the dates on which 
you receive replies, the goods that you ship, 
etc. Make your card system as elaborate or 



FILES AND LETTEES 65 

as simple as the needs of your business may 
require. 

THE WAR TRADE BOARD 

One of the most important features, how- 
ever, which you must never lose sight of is the 
Enemy Trading List. Because of the war, 
and in order to prevent merchandise going di- 
rectly or indirectly to the enemy, the export 
business of this country had to be put under 
government control. Eor this purpose, the 
War Trade Board was created. The War 
Trade Board is a part of the administration it- 
self, backed up by, and backing up, our presi- 
dent, and is therefore doing something for the 
good of our country so that even if it imposes 
certain formalities and inconveniences for the 
clearing of shipments, you should comply 
gladly because it is necessary for the protec- 
tion of our country. Its purpose is not to 
render difficult the exchange of business be- 
tween you and the foreign buyer, but merely 
to learn for the national security what his 
business and your relations with him really 
are. For this reason it should have ample 
powers to examine anything, at any time, any- 



66 :LB G OF FOREIGN TRADE 

where, and in any manner. It is for this pur- 
pose that the War Trade Board exists, namely, 
to investigate your shipments to your foreign 
buyer and to inquire into his use of the mer- 
chandise so obtained from you. If you make 
shipments to people or firms who are not on 
the Enemy Trading List, or if you make ship- 
ments to people who are absolutely guarantee- 
ing you that the goods will not be resold or re- 
shipped, or in any way reach the hands of the 
enemy, then the War Trade Board will not in- 
terfere with such shipments. On the contrary, 
our government is interested in promoting 
foreign trade, and its vast machinery is at 
your disposal in many ways for the purpose of 
helping to develop the export business. 

DESIRED INFORMATION 

The War Trade Board, therefore, to the 
honest exporter and to the honest foreign im- 
porter, is not a handicap, but a very great help. 
A large number of restrictions have been re- 
moved since the armistice has been signed, but 
nevertheless, the War Trade Board is still in 
existence, and the Board or somebody akin to 
it is likely to be in existence for years to come, 



FILES AND LETTERS 67 

and so it is advisable not only for the purpose 
of advising the War Trade Board, but also for 
your own protection^ that you should know at 
all times to whom you are shipping, who your 
correspondent is, and to what use he intends 
to put the merchandise. Ask your corre- 
spondent to send you the following inf orma-^ 
tion when he sends you an order. If, when yon 
receive his order, the War Trade Board re- 
strictions referring to the shipment of your 
product to this particular customer's country 
are still in force, you will need the information 
for the purpose of filling out the application 
blank for the Export License. If these restric- 
tions have been removed it nevertheless can 
not harm you to have the data in your files. 
If you will explain to your client that in giving 
you the information he is assisting you to ob- 
tain the government license, thereby expedit- 
ing the shipment which you are making for his 
account, you will find that he will readily 
comply. Ask him to advise you as to the 
following : 

'^ First — The full name of your firm. 
*^ Second — Have you any partners? If so, of 
what nationality are they? 



68 A B C OF FOREIGN TRADE 



iil 



' Third — If you are trading under your own 
individual name^ please state your nationality. 

^^ Fourth — How long have you been estab- 
lished in business ? 

^^ Fifth — Do you absolutely guarantee that 
these goods will be used only for consumption 
in your own country? 

^^ Sixth — Just what is the nature of your 
business ?'' 

All restrictions in connection with ship- 
ments to the countries of our allies have been 
removed. However, the War Trade Board 
regulations are still in force for several neu- 
tral countries, and as they change, or are sub- 
ject to change without notice, it is best at the 
time of making shipment to get the necessary 
information from the nearest W. T. B. office. 

It goes without saying that not only should 
you collect this information but you should 
also check every inquiry and every foreign let- 
ter which you receive, with the Enemy Trad- 
ing List, published by the War Trade Board, 
which gives the names of all firms with whom 
you are not allowed to do business. Do not take 
your correspondent's word for it^ but note the 
information he gives you, and check him up on 



PILES AND LETTERS 69 

the list. If you find that lie is not on the 
Enemy Trading List, do business with him 
freely, but if he is, forget him, ignore his let- 
ter, and mark the card in your file ^^ Enemy," 
thereby rendering impossible such a thing as 
your doing any business with him at a later 
date, through oversight. It is probably un- 
necessary to point out that if there is any one 
phase of the export business which you can 
not afford to neglect, this is it 

LICENSE APPLICATION" 

For each shipment which you wish to make 
to a foreign country, you have to apply for a 
license. If your customer is in good standing, 
and if you are in good standing, the govern- 
ment will grant an export license, which, since 
the armistice has been signed, is good until you ^ 
make shipment, although prior to that time, 
the license had a certain date of expiration 
marked on it. In filling out your license appli- 
cation, state the facts as concisely and as 
precisely as possible, be truthful in your state- 
ments, and you may rest assured that if your 
customers and you are all right, you will have 
no difficulty in obtaining the license. 



CHAPTER yi 

The Receipt of the Order, 

[When you receive your first foreign order, 
don't get all excited over it and imagine that 
you have already established yourself as an 
important and permanent factor in interna- 
tional trade. There will be a certain fascina- 
tion for you in that first order. It will look 
bigger and better to you, and will give you 
greater satisfaction probably than any order 
you ever received at home. But don't lose 
sight of the fact that while the first order is an 
order, and means business, it will not continue 
to mean business unless it is handled right 
Bemember that. If something goes wrong 
with a first order here at home, you can ex- 
plain it by telephone, wire^ or by writing a 
letter which the customer will get within a few 
days, but you can't do that in the case of a 
foreign buyer. The goods must be right and 
the order must be properly handled from the 
very start. Therefore, the first order is the 
most important step in the building up of your 
foreign trade. 

70 



THE RECEIPT OF THE ORDER 71, 

FOR THE LONG RUN 

Tou are not embarking in this business for 
the purpose of getting a single order, but 
rather with the hope and expectation of build- 
ing up a reasonably big business. Don't lose 
sight of the fact that after the first shipment 
reaches your customer it will be a long time 
before you can ship him any spare parts or re- 
place anything which he may need or which 
may have been omitted from the package. A. 
great number of automobiles are queered in 
foreign markets because the manufacturer, 
through carelessness or neglect, did not ship 
the necessary spare parts with the car. In the 
export business, just as in any other sphere 
of activity, it is well to put yourself in the 
other man's place. How would you feel if you 
owned a car and your spring broke, and you 
had to wait six months before you could re- 
place it, leaving your car out of commission 
during all that time — ^just because the manu- 
facturer neglected to ship with the car some 
essential that should have been included. If 
you will think of this, then you can easily 
imagine how your foreign customer will feel 



72 ABC OF FOEEIGlSr TEADE 

under such circumstances. It all comes back 
to the Golden Rule, *^Do unto others as you 
would have others do unto you. ' ' It is up to you 
as the manufacturer to guard against the pop- 
ularity of your product being lost or impaired 
by some trifling and annoying thing like that. 
To quote another example, if you were to ship 
one hundred women's coats, all of which are 
trimmed or fitted with a peculiar type of but- 
ton, the woman who lost such a button and 
could not obtain a duplicate in the store where 
she bought the coat, would not have a very 
kindly feeling toward the goods that bear your 
trade-mark. If anybody knows your product 
well, it ought to be you. Therefore, it is up to 
you to provide a supply of such parts as you 
know may deteriorate, or become lost, or need 
replacement for any reason. // you get an or- 
der for your product from any foreign country 
it is proof in itself that there is a market there 
for you to cultivate. Go after it just as you 
would over here. If you find that there is a 
demand on your goods in the Argentine it will 
pay you to make special efforts and write fre- 
quently to everybody in the Argentine with 
whom you are in correspondence, or with 
whom you can get into communication. 



THE EECEIPT OF THE ORDER 73 

THE RIGHT CONNECTIOIS^S 

You loiow that if you locate in a new town, 
or join a club, your standing in the town or in 
the club will be determined largely by the peo- 
ple with whom you first associate, or by the 
man who introduces you. It is exactly the 
same in a business way in all foreign countries. 
So be sure to make the right connections in the 
beginning, or you will regret it in the end. 

Every one, at the start, who gives you an or- 
der for your merchandise, be it ever so small, 
will immediately ask for an exclusive agency 
for the whole country in which he is located, 
which would prevent you from selling to any 
one else either directly or indirectly. The man 
who makes the proposal may be and probably 
is a very small merchant who is not quali- 
fied properly to handle your product even in 
his own town^ to say nothing of his entire coun- 
try. If you start a selling campaign in the 
United States and a man in Oklahoma City 
who has a small store sends an order for one 
hundred dollars' worth of merchandise on 
the condition that you are to protect him 
and recognize him as your exclusive agent 



74 ABC OF FOEEIGN TRADE 

for five years for the entire state of Oklahoma, 
would you do it? Of course you wouldn't. 
You would want to find out who the man is, 
get his rating, get acquainted with him, and see 
what he really can accomplish and what sort of 
selling organization he has to take care of your 
business in that state, before you would enter- 
tain his proposal. 

In the beginning of your foreign business 
you had better not even consider such subjects 
as the appointing of exclusive agents, the 
opening of branches, etc. 

Until you have had experience, sell to who- 
ever wishes to buy your goods and who is will- 
ing and able to pay for them, and to whom you 
can ship. Then when you get acquainted with 
your various customers, and learn how they 
are doing in their respective territories, yon 
can decide on your ultimate policy as to 
branches and exclusive agencies. 

STUDYING THE ORDEE 

Study your order carefully, take note of all 
the directions and instructions given, meet 
your client's wishes whenever and wherever 
you can and deliver exactly what the order 



THE EECEIPT OF THE ORDER 75 

calls for. Or, if it is an extended order, and 
you can not deliver exactly what lie asks for, 
cable him for permission to substitute what 
you have for what he wants, but never substi- 
tute without the huyer^s express permission. 

Study letter-heads. From them you will 
often be able to learn quite a good deal about 
a man and his business which will be helpful 
to you. Always attach the envelope to your 
foreign inquiry or order, as there are a great 
number of cities, especially in South .America 
l^hat you can not locate unless you know the 
name of the country, which may not be printed 
on your foreign customer's letter-head. This 
is very often the case. A postage stamp, how- 
ever, wUl always show the name of the country 
and for this reason alone it is advisable to at- 
tach the envelope to the letter. 

Then look over your card system and make 
sure that the name of the client from whom 
you have received your letter is in it. If it 
is not, a card for it should be made out at once, 
as the moment you receive a letter of inquiry 
or an order from him he becomes one of the 
correspondents whose cards are of special in- 
terest and value to you. 



76 :A B C OF FOEEIGN TEADE 

It would be good for you to know what com- 
modities your customer deals in, as evidenced 
from his letter-head, and it is also important 
to make note of his cable address as well as the 
code which he is using. 

If you do not know any foreign language, be 
sure you address him as completely as possible. 

EVERY LETTER 'A POSSrBILITY 

Acknowledge every order the same day you 
receive it, not only to show that you did receive 
it, but to inform your customer that it is hav- 
ing your best attention. Give him the fullest 
possible details, telling him of any changes in 
your product; of any increase or reduction in 
prices ; when you expect to make delivery ; in 
fact, bear everything in mind that has been 
said heretofore regarding the necessity of your 
furnishing full details and information. 

Don't judge a man entirely by his letter- 
head. Sometimes a letter written on a piece 
of paper without a heading and in a clumsy 
hand may mean a $50,000 order. Even if the 
letter on its very face shows that it is merely 
from some commission salesman, or agent, 



THE RECEIPT OF THE OEDER 77 

reply to it and give it all the proper attention 
because it may lead to business. Every letter 
you receive has in it the possibility of a sale. 
When replying to an inquiry or an order, 
make your letter individual, even if you incor- 
porate in it some paragraphs from your form 
letters, so that the recipient can not fail to see 
that it was intended exclusively for him. 



SAMPLE ILLUSTRATIOISrS OF LETTERS — HOW: TO 

ANSWER THEM AND HOW NOT TO 

ANSWER THEM 

MODEL ^^A^' 

Soerabaya, Java, June 1, 1918. 
Gentlemen: 

I am writing at the request of a friend in 
this country, who does not speak or write Eng- 
lish fluently. 

He wishes prices and information on the 
subject of enamelware, and if you will kindly 
give me that information, I will be glad to 
transmit the same to him and help him all I 
can to come to a conclusion. 



78 :a: b c of foeeign trade 

HOW NOT TO ANSWER 

Dear Sir: 

Yours of June 1st, inquiring about enamel- 
ware, received. 

Enclosed find descriptive matter^ prices and 
details, wMch please note. 

Yours truly. 

Criticism, Too curt and abrupt, and OTerlooks the opportu- 
nity to thank the writer. 

HOW A LETTEK LIKE MODEL ^^A^^ SHOULD 
PEOPEELY BE ANSWERED 

Dear Sir: 

We beg to acknowledge receipt of your favor 
of June 1st, inquiring on behalf of a friend 
concerning our line of enamelware. 

It pleases us not only to receive your in- 
quiry, but also to note tbe interest which you 
take merely as a matter of accommodation to 
your friend. Of course, he appreciated this. 
May we not thank you also. 

We are pleased to enclose herein illustrated 
printed matter with full information as to 
prices, discounts, weights, measurements, 
etc., and trust that this will fully enable you to 
inform yourself so that you may advise your 
friend. 



THE RECEIPT OF THE ORDER 79 

Please know that we stand back of every- 
' thing we manufacture and that we can assure 
you of the superior quality of our enamel- 
ware. 

We shall be glad if you write us freely at 
any time, if there is any information you re- 
quire, even though it is not in connection with 
our own lines. We shall be happy to serve you 
to the best of our ability. 

Awaiting your early reply, we are 
Yours truly, 

MODEL ^^B'' 

P. O. Box 347, 
Durban, South Africa, 

Sept. 15th, 1918. 
Messrs. Black & Browning, 
1818 Broadway, 
New York City. 
Gentlemen : 

Please let me know export prices of your 
filing cabinets, as illustrated in the June issue 

of the Magazine. 

Yours truly, 

Franklin & Jennings. 



80 [KB C 0¥ FOREIGN TEADE 

HOW NOT TO REPLY 

Dear Sir : 

Replying to your letter of Sept. 15th, beg 
to state that the style of cabinet shown in our 
advertisement referred to is $38, F. O. B. New 
York City, packed for export. 

Trusting to hear from you by return mail, 
we are, etc. 

Criticism, Insufficient salesmansliip. Give them the infor- 
mation on the specific item they inquire about, but offer them 
also the rest of the line. Furthermore by volunteering the in- 
formation as to freight, etc., you may save four months' time in 
landing the order. 

HOW TO EEPLY 

Dear Sir: 

We are pleased to have your esteemed fa- 
vor of Sept. 15th, stating that our advertise- 
ment in the Magazine 

came to your notice, and asking for price of 
the particular style therein illustrated. That 
model is $38, and includes the following equip- 
ment. ( ), packed for export. 

Please note, however, that we have other 
models, some less expensive and some at higher 
prices, according to capacity. The catalogue we 
are sending you under separate cover fully 
describes our lines and we trust that you will 



THE RECEIPT OF THE OEDER 81 

find therein many articles that just suit your 
special needs. 

We call your attention to the usual method 
of quoting prices F. O. B. here, and would re- 
quest you in remitting to include the custom- 
ary charges for freight, insurance, etc. On 
our last shipment to your section these items 
amounted to a total of approximately $22 on 
one cabinet of the size you refer to. 

We await your early commands, to which 
we pledge our faithful and prompt attention. 

MODEL "C' 

872 Queen Anne Street, 

Sydney, Australia, 

Dec. 23, 1918. 
Standard Furniture Co., 
Grand Rapids, Mich. 
Gentlemen : 

We handle general merchandise, and would 
like a C. I. F. price on your high grade office 
furniture. Please quote us the lowest possible 
export prices, as the landed price at best is 
very expensive. 

Yours faithfully, 
Southwick Emporium, Ltd. 



82 IK B OF FOEEIGN TRADE 

HOW NOT TO REPLY 

Gentlemen : 

We appreciate your valued inquiry of Dec. 
23rd, 1918, concerning our line of Mgli grade 
office furniture, but regret that we can not 
under present conditions offer any quotations, 
except on a F. O. B, basis. Prices and all other 
particulars are given in full detail in the en- 
closed pamphlet, which we trust will meet with 
your favor, and we shall be very glad to re- 
ceive your order for any of the many items we 
manufacture. 

Criticism, Lack of brains in analyzing the inquirer's letter, 
and lack of tact in framing a negative reply. Your first letter 
in replying: to a new prospect is your golden opportunity. Don't 
orerlook it 

HOW TO REPLY 

Gentlemen : 

We appreciate your valued inquiry of Dee. 
23rd, 1918, asking for C. I. F. prices on our 
line of high grade office furniture. We are 
enclosing an illustrated pamphlet, fully de- 
scribing every item we manufacture, and con- 
taining a number of helpful suggestions, 
which our experience in export has shown to 
be useful to many of our clients. The enclos- 



THE EECEIPT 0¥ THE ORDER 83 

ure also gives you all information with re- 
igard to measurements of our product, packed 
for export. This data has been compiled espe- 
cially to help our clients in foreign lands cal- 
culate C. I. F. prices, which fluctuate accord- 
ing to changing rates of freight and insurance. 

We call your special attention to the sug- 
gestion that in shipping furniture, it is wise 
to utilize the vacant space in the drawers, etc., 
to include with the shipment other articles 
which you may be able conveniently to handle, 
and which may be packed in such empty 
spaces. As you are in the general merchan- 
dise business, it should be feasible for you 
to do this, and if you care to have such 
articles sent to us for packing with the furni- 
ture which you order of us, we shall be glad 
to do the packing for you without extra charge. 
This might aid you in making a material sav- 
ing in ocean freights, and thus reduc'e the 
landed costs of your merchandise consider- 
ably. 

As to C. I. F. prices, we shall be glad to 
quote such when shipping conditions are re- 
stored to a normal basis. At present, it is not 
possible, without taxing you too high for the 



84 :A: B C OF FOEEIGN TRADE 

margin of doubt and risk. Hence, we quote 
only ¥. O. B. factory, Grand Rapids, or 
F. O. B. steamer, as per price list enclosed. 

Please let us hear from you soon, as we 
value your account and should like to serve 
you. 

MODEL ^^D^' 

Kobe, Japan, June 17, 1919. 
American Carbon Paper Co., 

Portland, Ore. 
Gentlemen : 

How much do you charge for carbon paper 
in quantity — ^that is, by the case ? Also state 
how many sheets per box, etc., and in what 
colors you manufacture it. Send samples by 
return mail so we can cable you our order. 
Very urgent. We are writing to several firms 
to-day, but as you are located on the Pacific 
coast we expect your reply by earliest post. 
Yours faithfully, 

T. Suruka Shoten. 

HOW NOT TO REPLY 

^^ Gentlemen: 

We manufacture carbon paper in two colors 
and two grades. Samples of each enclosed, 



THE RECEIPT OP THE ORDER 85 

each marked with the export prices, based on 
a minimum order of five cases or 500 boxes. 
We are very anxious to introduce our car- 
bon paper in your field, and therefore make 
you a special discount cf 10% from the net 
prices enclosed as an extra inducement on this 
order. 

Criticism. The evident urgency of this case required that the 
letter of reply should embody in itself all of the necessary in- 
formation. The stenographer omitted both the samples and 
the list price and the order was lost. 

HOW TO EEPLY 

Gentlemen: 

Eeplying to your valued favor of June 17th, 
we manufacture carbon paper in two col- 
ors and two grades. Samples of each enclosed. 
Grade #1 is $3.00 per 100 sheets. Our prices 
are based on the following sliding scale of dis- 
counts, based on the quantity ordered. (Men- 
tion discounts.) 

Grade #2 is $4.00 per 100 sheets, less the 
same discounts. Black and blue colors are 
same prices. We guarantee these to be the 
equal of the very best and the second best 
grades, respectively, in the market. In addi- 
tion to which, we call your attention to the spe- 



86 A B C OF FOREIGN TEADE 

cial wax finisli, whicli makes our carbon non- 
smudge, and which preserves the chemical 
from drying. 

Please cable us your order at our expense 
and we will ship by first outgoing steamer. 

Yours truly. 

Note: Now if the samples are inadvertently omitted, the 
recipient has at least enough information to justify his order- 
ing without a sample. The other way, he would have to write 
again for the information, or order blindly, without any Idea of 
price, discounts or quality. 



CHAPTER VIl 

Filling the Oeder 

It will pay you to give your foreign orders 
even better attention if possible than those in- 
tended for domestic trade. If there is any- 
thing wrong with the merchandise you ship to 
a domestic purchaser, you can explain it, or 
inspect it and replace it, but you can not do 
that when you ship one hundred cases of en- 
ameled wash basins to Siberia and receive a 
complaint about the finish of the goods. Noth- 
ing more can be said in this connection than 
has been said already, namely; follow im- 
plicitly your customer's instructions, and use 
the greatest possible care when selecting from 
your stock or when manufacturing the mer- 
chandise you intend to ship. 

PACKING 

In most foreign orders you will find pack- 
ing instructions to which you should adhere 

87 



88 ABC OF FOREIGN TEADE 

as implicitly as you do to the instructions re- 
garding the merchandise itself. You naturally 
realize that merchandise which is shipped 
to another corner of the globe depends 
very much on its packing for its arrival in a 
safe and undamaged condition. If you live in 
New York you will give more pains and use 
better and more material for packing a parcel 
which you send to Oregon than you would for 
a parcel going to Jersey City. Your export 
goods are handled by the railroad; they are 
hauled at the port of embarkation from the 
railroad station to the steamer ; there they are 
dumped on the dock; they are hoisted in a 
sling, together with other goods of all kinds 
and sizes on to the steamer's deck, or into the 
hold; there they are taken over by stevedores 
and stored away in some corner of the ship's 
cargo-hold into which they seem to fit. Then the 
boat goes out to sea, she rolls and tosses and 
*^ shivers'' many times before she reaches her 
destination and your cases will probably be 
flung around, and turned over a number of 
times before they reach their destination. 
When they get there, they are pulled from 
their loading place, again thrown into the sling 



FILLING THE ORDER 89 

with a lot of other merchandise and dumped 
on a dock or into a lighter. In many ports, 
although they are called ports, the steamer 
can not go to any dock or pier. In that case 
the goods have to be discharged at sea into 
lighters, which toss up and down alongside the 
big steamer, and the sling containing the mer- 
chandise is frequently ^^ caught" by them with 
a crash, while the lighter is on top of a wave. 
Then they are pulled ashore, dumped on the 
dock, and native coolies put them on their 
backs, or carry them on bamboo poles, or load 
them into cars and bring them to the cus- 
tomer's warehouse. Again the goods may be 
carried on the head of a native into the 
interior of Africa or on the back of a mule 
into the South American mountains or be 
transported in a little boat for many miles 
up turbulent streams. Add to this climatic 
conditions — the moist, penetrating salty sea 
air, and sea mist^ the possibility of the 
goods getting wet in one way or another, 
and you will no doubt realize that any 
care which you give to the packing of your 
goods for export will richly repay you, and will 
please your distant customer, who anxiously 



90 :a: B c OF foeeign trade 

awaits their arrival in good condition. If he 
sees that you have properly packed and safe- 
guarded the shipment for him, he will become 
your loyal client and friend. If you ^^make 
a mess of it/' especially on your first ship- 
ment, you had better forget him, because you 
will never hear from him again. To stand the 
rough handling and other adverse influences 
mentioned, you should use strong sound lum- 
ber when boxing, free from knot holes, or if 
there are any, be sure that they are properly 
filled, and that the various planks or boards 
which make up your cases fit closely together. 
Never ship a case packed for export without 
an iron strapping around it. Avoid crates and 
bales, as they do not stand much rough usage. 
Always line your cases with two or three lay- 
ers of water-proof paper. If the merchandise 
is esj)ecially perishable or subject to moisture, 
use tin-lined cases, which should be soldered. 

PACKING COST 

Your foreign client is willing to pay for the 
extra cost of packing for export above the 
cost of packing the same merchandise 



FILLING THE ORDER 91 

for domestic trade. With few exceptions 
the packing charge for shipping is in- 
cluded in all prices quoted by; Amer- 
ican manufacturers so that a certain 
amount of expense represented by cost of ma- 
terial and labor always goes hand in hand with 
any shipment the manufacturer makes anyhow. 
If the requirements of export packing cause an 
expenditure considerably greater than the cost 
of packing for the American market, the for- 
eign buyer is quite willing to pay for it. On 
the other hand, if you do not pack at 
all for shipment in this country you can 
charge the full cost price of packing 
or boxing for foreign trade. For ex- 
ample, automobile manufacturers ship their 
cars in this country simply covered with dust- 
ers. If the same cars are shipped to a foreign 
country the manufacturer charges anywhere 
from thirty to ninety dollars for the boxing of 
each automobile. 

CHECKING AND PEOTECTING 

Check everything which goes in the case, tie 
a tag to it, and number it. Every individual^ 



92 A B C OF FOREIGN TRADE 

piece, or part, should have a label, or a tag, 
and the tag or label should be numbered. At 
the top of the case you should have a packing 
list giving the contents of the case, and the 
numbers and pieces so labeled. Perhaps you 
do this for your domestic trade anyhow, but 
if you do not, you certainly should adopt 
the system for your foreign trade. As 
stated before, if there are any parts which 
would suffer from moisture, or sea air, you 
should try your best to protect them. For 
example^ if you have any nickel parts which 
may be so affected, you should grease them or 
rub them over with vaseline. 

You also want to prevent the possibility of 
your merchandise being thrown around in the 
case, so pack it tightly. If it is a heavy^ piece 
of machinery, an automobile, or a typewriter, 
fasten it securely to the bottom of the box. If 
it does not fit exactly in the case stuff the 
empty spaces, but do not use straw or hay, as 
they attract and absorb moisture, and clog up 
the machinery. 



FILLING THE ORDER 93 

"WEIGHING AND LISTING 

Furtliermore, weigh every article in the 
case, first separately, and then weigh all of 
its contents together. Enter the weight of 
each article on your packing list, opposite 
each article. The total of this weight list rep- 
resents the net weight of the merchandise. 

In many countries it is necessary to pay the 
duty based on the legal weight. For this rea- 
son you should also weigh your stuffings. Le- 
gal weight is the weight of the packing mate- 
rial or containers, packing, etc., separately. 
Also add this on your packing list, should 
your customer require the legal weight. 
Finally, you weigh your case as it is, i, e., the 
box itself, with the stuiiing, and the goods in- 
side, the weight thus obtained being the gross 
weight. This also must be shown in your 
packing list. 

If you manufacture a variety of articles be 
sure to ascertain that they do not pay a dif- 
ferent class of duty, as in that case it will not 
be advisable to ship them in the same case. 

As the weights and measurements of the 
cases are necessary for freight and import 



94 :A: B C OF FOEEIGN TEADE 

duties they should be carefully taken and ex- 
pressed in kilograms and meters wherever 
necessary. Wherever tariff weights are re- 
quired your customer will instruct you. 

USE EVERY CARE 

In giving weights and measurements, be ab- 
solutely sure that you are scrupulously exact. 
The slightest difference between the weights 
and measurements given by you on the cases 
and those given in the invoices may 
cause your customer the greatest trouble, make 
him subject to heavy fines and in some coun- 
tries to confiscation of the goods. Don't for- 
get that the foreign customs collector suspects 
everybody of trying to smuggle. That is his 
duty, of course, but for this very reason you 
must be careful indeed, when checking 
up and marking your weights and measure- 
ments. In connection with the weights, also 
remember that Great Britain and the British 
Colonies still use the long ton. The British 
ton or long ton is equivalent to 2,240 pounds, 
whereas our own ton, or short ton^ has only 
2,000 pounds. Always state, therefore, when- 



FILLING THE ORDER 95 

ever you express the weight in tons, whether 
you refer to long or short tons. 

The British also still retain the cwt. or 112 
lbs* and the quarter or 28 lbs. While cwt. is 
spoken as the hundredweight, it does not stand 
for 100, but for 112 lbs. 

The British also still use the imperial gallon, 
which is one-fifth larger than ours. And their 
quarts and pints are, therefore, proportion- 
ately larger. If shipping liquids, always state 
whether your measurements are given in 
American or imperial gallons. 

CUBIC MEASUREMENTS 

The following tables (pages 96-111) for con- 
verting feet and inches into meters, and pounds 
into kilograms, will be of assistance to you, 
also for calculating cubic measurements. 

Do not overlook the fact that when you 
measure something for shipment it is the wid- 
est or the highest point which counts. If you 
ship a case built like a wardrobe trunk 
with a top elevating itself at one point, it is 
that highest point by which you would have to 
measure the case. As cubic measurements are 



96 ABC OF FOREIGN TRADE 



S -; ^, ra w 

'O K ."t; w <i> P* 

^LJ D C O ^ 

>t^ 0) bo 'y 



s 



«2 



Pi 
O 



0) , ^ 
■^ *- cS S 

C.bfl-^SS 
-M*3 <3;_. ^ 



§• 





000 




tHOo 




iHO 




iH 


lifl 


.•^ 


.s 


*Sg 


c3 




0) 




l< H^ 




je ^ <» 






^00 


03 

(1* 


llllli 


d2. 

0) a>:;H 


'djsjii 




51^ II 

05 05 ^ 
O O O rj 

II II lie 



5 c:o 



rl|T)a»0JD2: ^ ■*-> ,0 '•-' r^ ^ 



gwg"^ 












K.C'^M^ ce ggiS Ca; ^B ^^ 






7* d ^!3B'C^^*=^^^'S-»^S:S'2 









Si 

-I 



^ Li bct:'^o 



CO 

a> 

CO 




^ II OJCD 
*^ \2°° ^ TO O ^ r/)*^ ^CC.S^ > a 

ill: "^l^-g-l-^^l 

•^ C bCbcS'C "^ -rJ .S "^ +2 +:; go 

/2 .t: .;=' q; j^ rj <^' cd ^ u-7\^ b>t- 

V ,-1 _ .r: rl /1A --^ fij ^ ^ /-< "^csii/^ 







® W 13 +J w 






"S^^SS'd'SSS 



p P.'d 



0) c^, ^ V! CD ca <u ?; ii „ --, ?; b^ 
S02«h;:3.S U 5 gJ+3 oca O'O cJ 



•ts .2 <» «^ 

SATO'S 



FILLING THE ORDER 



97 



a 

S 2 
2 o 

o '-' Q> 
«> oo 



CD^ 



I t^ 



O TO 



o J3 a> 

ill 

CO 



^rz 



O CDtHtH 



CO. 



2 



•O b <y c ^ o c; 

f^ J^ o JJx: "^ fi «1» r* ® •-• 

^M *^ c .2 «^ '-^ ^ f^ S •S 
•a llg'SlllloSllgcg^ 



02 



II 









CO 



rH »5 









02 






to 

o 

<D 
U 






o 

II 



§ 






SSllll |§^||g^g?| 



5 COO ^'g'^^^i^'^.o'Si^ 



©poo pa)®^©7l7i<D© 
«a?a2W«MW02CQ«MWj-,c3CQ02 



S 3 

c 
oo 

Oo 

o II 









II 



;3 © 
o © 



h ^ •s^'^t- 
sIsloiiH ]1S 

OOO Or-i o o .^ li 
OOO OO o o«w,Q o 



g 

o 

0)0 

-So 






Si! ^ 

l2^aiirf 

"*-' o , ■_, © 
O II ^^-"^.rf 
C Ijoeo O-g 



goO *^ c^i^ooo 11'' it 




^ l: ® r^* 

-. o ?5 

Sog2 

is: 



o;c; © 
c3^, 



§1! 

o* © 



w^ 



o 



^ O 2 ^ o c 

r#N ^ 02 O g 
<^rC CH -.O O 

5^£"Si| g 

^ (^ rri Ci ^ Cc r^ 9^. 



(D 






O 



E2 

O © CO 

Jh s 

4J -MtHO 

© ©oo 
S Sdo 

1 ©II II 

O !^ tn ^ 

£Ssa 
iii^i 

Ph S ® © 









3- 

O 



© 4J 

C © -^ -j 



"ESh iJ 



© 

•p^ © © 

P © © 

"^S2 



C © 

©d so 



O O O 

O p p 
OOO 
• O 

*^(-roo 






.°P«mS^^ II II © 

*^-M ©13 © C CJ CJ 5 
^ O^ O 

o 



|§c^§g|§gg^ 



r 



98 ABC OF FOREIGN TRADE 



!;S !! S -g So g«© goo 






^ 






,5° s„ -g t.i.-s :sM 



•So^ oo Ml bo .T;^ -^ ^'^ «o C 5h<=» Q,,^ 




>' 






;; II g^ ^ ^§S ^.^ II ^'"w . g^^ . :^5 

I,. % s^ ^ '^^g s§ "^ air Pst s- 

;lS^g^-^'^ ^ a^c3 00C-, I gj„->o>.§ ^^g^w jg-^ 



•3 0gA^M-3 ^^ ^.^ oS^^^J^o^a 
oodS«j3 go's S"^ ^P^-^^^ai'^ 

Willis l|i§-siiH<^il|| 

I 2 § ^ S S-g £ fi g S ■s g g |-g > |a g-sl I h° S piS 







FILLING THE ORDER 



99 



II 



13 

O fl 

II *o "g bo 



S 



P ft? 



5% 



gill 2 



<u 



CJ 



>» II 
2 " 
is ^ 

o p 



w , 






»© . 
i? o So 

!=J ll'~''S'P 

SSilgo 
II '§^«S 

ill5 













'^§ 







>.S'g 



^ o 00 o :£:J *J H 







•H t-< iH iHtHiHtH 




'd 
. fl 

go. 
o 

Og' IH .Hi 

S"d 






SI 



TO 3 

'O p p, 
CO 

03 ^-^ 



fil^Si 



o<^» 



_5 ^ U 

S^g|Sgfel|!I§|g'g . 
^SSo^^-oS^oSii^o 

^!l|||l5?llllr. r^^gog^ 

5 aaorH o OS p, 



■MO CUo;©-, K 

--2 ^ P ^ "^ ^ q; -M c3 w d 





SfHiHf-lrti-lrHr-it-l ii. iH 



.C^*:! 3^ O 5 0) ;h *H >M OJ t^ >H O ^ 



100 ABC OF FOREIGN TRADE 










w^ X^ f^ ^^ p ^ o fl 2-^3 '^';3 sfc-< o ^ oj a> o ^ "^ „ 



FILLING THE ORDER 



101 





B 




B 




o 


OQ 


O 


fH 


«M 


^ 


o 


w 


-M 


i 


g 

s 




u 


o 




WQ 



P5 h 

^1 



^ 






w 


ci 




TO 




•d 


TO 




(i; 


ri 




C3 


<: 








to" 


<M 


W 


o 


iJ 


f^ 




2 




0) 


TO^ 


(^ 


QQ 


« 




<| 


G 


h 






-t-> 




n 


H 


^ 


{^q 


TO 


U 




f^ 


^ 




TO 




>» 




pa 





§ 


2| 


a2 


1^ 


O 01 

5S 


o2 



C TO 



O CO 



l>Tj4r-IOOlrtC<IO>COCO 



t- O -^f 00 rH LO O^ (M 



CO o 



t-OOOlH 



O T-i iH <M M CO T*< tMO <£> CD t- 00 00 05 C5 O tH t-» CCJ CO CO t1* 



OTHMco'*i*»a<Ot-ooa> o th M CO Thirs ci t> 00 o> Othnco 



COt-O-^t-r-r-^OOrH 

OTH(MC0"^L!t>?0t>-00 
CDCSJ00"**<O<X>(M00'^ 



lOOO 
COCQ 

ot>- 



c<iicas<Mt»asc<no 

C<Ji-lOOC50000t>» 

THc<jcoTfrt>u:)«r>t>- 

CO O^ k-O r-l t> CO Ci iri 



05C0 500 
CDtOlClO 
00 CiOtH 



rH CO Tj* «} 00 Oi rH (M "^ CO tr- C 



:::; otHNco'^w^t-oooi oiHc<jcor»<ir5pb-ooo> othc<ico 



TH04fOr>-r-4COO'<! 

csooooi^-t^cocou 

t-irSCOrHOSt-ioCi 
OTH<MCOCOTt<U3«i 

cocooiC^jiraooTHT 



CO t- iH <£) O "^ 00 CO t- iH COO-^00 

■^ CO CO (?q oj r-( o o 05 oa oooot>co 

Oi t- lO CO tH 05 t- ITS ca 0> OOCOrfC^J 

t> oo 05 o T-i T-i cq CO ■<*' lo locDt^oo 

O CO CO O CO CO Ci Cq lO 00 r-l"«!*<t^O 



iHOqcOUSCOt-OSOTH 



OiHMOO^lOOfOOOl O iH Cq CO '^ la <C l> 00 0> OiHC<JCO 



COC<IOO««*«OCOC<100T*4 

lOiHcoc^ioocooa'^O 

■^O5CO00(rqt>.rHCOT-« 

cocvja5LOc;jooir5THOO 

t-U^(MOOOU3COiHOO 



05 lO tH t- CO Ci Irt iH t^ CO CitOrHt- 

iLiO tH !>• C<l 00 CO OS lf5 O CO r-liHCOOO 

lO O Tfi Oi CO OO cq t^ (M CO T-iOOTfi 

■^r-^t-COOCOCOa5COC^5 Cii-t<MOO 

COrfi-HOt^-TfCCJOSt^irs c<Jrt*oou:> 



OtH<MC0C0^10<0;0 t- 00 05 05 O r-< (M (M CO "^ USOOCOt- 



OTHC<lCO"«**lC50t-00 0> O iH M eO ^ lO ;0 t* 00 CS 



COt-OCOb-OCOt^OCO 
COrHOOCCOtOCOTHOOO 
0C0iOO'r-iC<JC0'^»O10 
OOOt-l^COr-IOt-LrteO 
OOOCOCOC5C<J'nh<t^OCO 



t-ocot- 

COr-tCOrH 
COO5O0OS 
r-(00 t-U5 
COOtHtJ* 



COt-OCOb-OCOt-O 

OOCOIOCOtHOOOCOIO 
OrHCdOOTfiLO^nCOt- 
OOCO'<*<C<IOCOCO'^C<I 
C<JU500THTj<?oOiOaU3 

CO CO oi CO CO OS cq CO OS 

rH iH rH C<J (M Cq 



OTHC^CO^lOCDt>-OOOi O T-f Cq CO -* lO CO I> 00 0> OtHdCO 



OOOOOOOOtH 

ooco-^c^oooco-^c^i 

^J'OTfOi-^OOCOOOCO 

C OT-^T-'c^•J(^qcoco"r^* 

CO CC^ 05 CM U5 OO rH '>a'_ t- 



O OO CO r}« Cd O OO CO "«!»< C<l OOOCO"'** 

OC'COt-CCIt^C<]COrHCOrH CDcCItOO 

TfUtHOCOCOt-t^OOOOCi OiUiOrH 

C> CO CO Oi CQ iLft 00 r-< Tfi t» O CO t~ O 

co" co' CO co' >«*« T*i' -^ lo to ifij CO co' «o t^ 



01-»cl€0'<•^r^<oc^ooos oi-ic^w^iocet-oooi Othcqco 



102 A B C OP FOREIGN TRADE 



no TO 



rc3 TO 



3j3 


m 

•< 


60 



t- M< r-< 00 <fi eo O b- rt« »H 00 lA e<l Oi b- -^ iH 00 10 

«©COO«OCOOt-COO b- CO O t- CO O t- *«!»* o t- 

irs th t- c<i 00 M^ OS 10 tH «o ca 00 CO Oi 10 o «o cci t» 

O tH rH C<1 ca CO 00 -^ to lO ?C «» t- t- OO OS OS O O 

THOaeOT»*l£D«Ot^00*CS O rH C<i CO -^ lO «0 t> OS o 



OiHe^CO-^lOOC-OOO OTHC<je0^iOOl>000 



eo t- o CO b- o CO b-'O 

CCKMOSirSiHOO'^Ob- 
««*<OSCOOOcOb-<Mb-T-4 
OSOOOOb-t-CO?OlrtU9 
0»HC<ioOTHift«>b^OO 



cob-oeot^oeob-oco 

coos«ocqooio^b-rj<o 

«0OU5OT»H0STtH00C000 

•^ "^JCO CO <M rH iH O O OS 

OS O tH N CO "^ Irt «0 b^ b^ 

rHTHiHrHTHiHrHrHtH 



Noscoeo 

CO OS ^ o 

tHtHCCICO 



Or-<e<ico 



OS 0000 1- 
oo'osoth 



OrHC^CO^lOtOt-OOO O tH C<J CO ''^ Ifi <0 fc- 00 0> OrHe^CO 



•«*OSCOOOc<j?£)iHlOO 
OOtHtH<MC<ICOCO"><1< 
rHC^C0'rt<U3«OI>00OS 
t-"^'rHOOU3C<IOS?OCO 
^OS"T1<OOCOOOC<H>'G^ 

c<i"^b^osc<i"*t-^osc<J 

rH T-i rH tH C<l 



O iH Cvl CO <^ U3 CO b- 00 0> 



t«ooeob-c<j«ootooseo 

tt-5t<U3lOCC)«Ot^b-b-00 
5THC<ICO^U3?Ob-OOOS 
H00L0<M0S?DC0Ob-"^ 
-TH«£>lHiniOU50^0S 
J< b^ OS <M* "xjJ l> OS C<j *** CO 

qcacqcococoeori*'^'*** 



ooe<ib-r-i 

ooososo 

CCIOSCOCO 

'<*< 00 00 00 



^iHcaeo-^iocot^oooi 01HCOC0 



11 


< 




i2 

0) 




^6 



0>t-«0Uti>^fC<liHO0S 

<oeoot-M<THoour5TH 

Tt<OS"<^OOCOOOC<|b-C<l 
OOrHrHCQirCICOCO'^ 
•^OOC<|CDO'^OOC<J«> 
OOTHTHCqCQC^COCO 



b- <D 10 CO C<1 tH O 00 b- «r> »f3COC<jTH 

00 U3 <M OS to CO O CO CO C> t- "«*< tH 00 

CO rH CO O 10 O CO OS "«*< OS CO OO CO t- 

"^ 10 10 CO <ri tr- b- 1- 00 00 050SOO 

O "^ 00 <M ?0 O "«!l^ 00 C^ CO Ot^OSCO 

^ ^' T*J 10 iro Co' O CO b^ b^ 00* 06 00* o> 



OtHC^ICO'^'lOCOb-OOO OrHC^ICOTt^lOWt-OOO OiHCqcO 



OS OS 00 t- CO CO 10 
^ tH l>. CO OS iLiO iH 
OS OS 00 00 !>• b- 1- 
CO b-rHtOOSCOb- 
^ O CO rH to C<lb- 
O »H rH cq* cq CO CO 



C0C<JNTHOO05 00b-b- COIOIO"^ 

OS UO tH b- CO OS "rt< O CO (M OO -^ O CO 

COCO 10 Lfl UO -^ Tt* CO CO CO C<J C<1 tHtHtHO 

rHlO OS CO t- tH LO OS CO t- tH IfO OS CO b- rH 

COOO CO OS Tf O U5 O CO r-l b- C<I f CO 00 T»< 

10 U5 CO* b" b- 00 00 OS* OS O O* iH* iH* M 



O rH d CO '* 10 CO b» 00 0> O rW C^ CO Ti« lO CO t« 00 O OtHC^CO 



COUDb-OC<IlOb->OC^ 

COCOOSCOCDOSC<lCOOS 
UDOirOrHCOTHb-C-qb- 
OOb-lLOTj<(MTHOSOOCO 
tH CO* 10* b- OS tH Cq rjJ CO 



lOI>OMU0t^OC<lU5b- OMUOb* 

cq uo OS c<i uo 00 Cd UO 00 r-* in OO tH "^ 

CO 00 CO OS Tt* OS ITS O UO tH COrHb-M 

ifo CO cq o OS b- CO uo CO cq oosb-co 



4JTO 0»Hc^CQ'^liOCOt«000> OiHC^C0^U5C0|>00 0> o»Hc<ieo 



FILLING THE ORDER 



103 



1 




i2 


^5 


09 


D9 

O 



w 



03 



o 

o 



0) 

3 









N O 00 «0 ITS W tH Oi t>» «0 •*t<(MOOO 

OOCOCOrHOSt-lOC^OCX) CC-'fCvlOS 

t- iH lO C5 C<| CD O -^ OO tH U5 Oi CO CD 

CO (M O OO t- tfS ''^ C^ O 05 t-lOri^CM 



O tH C<l CO tH lO ?0 1» 00 05 OrHC«5CO^U3<Ot-00 0> OrHC<lCO 



OOt-U3COC^OCX)b-K5 
COt-iHlOOSCOCOO'-*' 

XOOUtiOCOrHCOr— It- 
COC-O^t-TH-^OOrH 



CCC<:rOOO!>'lOCO<MOOO t-LOC0(M 

OO (M CD as CO C^ T-^IO Ci C<I CD O Ttt oo 

COCDOOOCOIOOOOC^IO t-0(rqrj< 

C^C-C^IOOC^-SOOCQOiThOS rt^oioo 

Un OO CO LO C?5 C<J CD as CO CD O-^t-iH 



OOtHiHtHCsKM coco CO CO ■'l^ Tt* "^ U3 ITS lO CD CD t«-Ot-00 



OTHCOCO'*^COt-OOOa OtHNfO-^lfStDt-OOO* OiHMCO 



tDCOa>u:5THt-r*<OCD 

"(fascooocot-coc-iH 

OOrHTHCOCOCOCO'^ 
<MTt<CDOOOCO-<#CDOO 

(?<j -^ cd' oo T-i ci-i L^ !>^ a> 



CCI 00 lO r-l !>• CO O CO (M 00 "^iHt-CO 

CD O LO O -^ as -^ OO CO t- COt-THCD 

M< LO LO CD CD CD t- t- 00 OO OS OS O O 

OCO-* CDOOO cq-^cDoo ocou^t- 



^ OrHCOOO-^iOCDt-OOO^ O tH C<J C-S rj< lO CO t- 00 Oi OiHCQCO 



OSOOOO t-CDlOlC^CO 

IftTHt-COasiOrHt-CO 
COC^O-^t-T-llOOOCO 
LOOCDr-ICDCOt-COOO 
Tt<a5COOOC<jt>THCDO 
O ' r-J r-I C<i <M* Co' Co' Tt< 



c^ic<jTH<r>asasoot-cocD iO'<*icoco 

asL!::>THt-cooo'«!t"<ocDc<j ooTt<ocD 

lO OS CO CD O CO C- tH Tfi OO tH LO OS C<J 

CO OO -^ OS U3 O KO tH CD tH t- CO t- CO 

U3aS'«fOOCOOOCOl>^r-ICD C^iaOi'^ 

rj<* •«!*< iri id cd' CD* t^ t-^ oo' oo* os as' as' o 



O r-t cq CO rH U3 ^ t- 00 05 O tH <M CO ''J* lO <D t- 00 0> OSrHCOCO 



oocDeoiHa5t-"<*c<io 

r-<COLnc-000>COrt<CD 

■^oocqcDOioascot- 

CDCOOSlOCOOO'^rHt- 

coirst-ocoLOOOiHco 

OOO rHr-IiHrHCO^ 



OOlOCOrHasCD-^COOt- 

t>»aSTHCO"^CDOOOCv!CO 
tH lO O -^ oo CO CD -^-i lO C5 
Tf O t- CO OS CD CO C'i l-C rH 
CD CS tH "^f CD CS C-q 'g-' t-- o 

CO* ?vl CO* CO* CO ro' •<*< -** -^ 1x2 



IftCOtHOO 

lot-aso 

CO t>THCD 

COTtir-lt:- 

coijrsooo 

id id 10 CD 



OrHCqCO-^USCOb-OOOi O iH CI CO '•i* lO <X> t- 00 05 OtHC<JCO 



cot-ocot-ocot-o 

LOOCDiHCDCOt-COoO 

oot>>»i^'<*'c<ji-iascx)cD 

t-lOCOrHOSC^-^COO 



eotr-ocot-ococDoeo 

C000-^aS'<*'O>L0OCDiH 
lOCOCOOOSOOCDlrtCOCO 
OOCD-^C-iast-LOCO-rHaS 



CDOCOCO 
CD CO C- CO 
OOS C-CD 
t-Tt<COO 



OiHC^WO^USCOt-OOOi OtHCQCO"^U3CDt>OOai ©tHCOCO 



104 ABC OF FOREIGN TRADE 



iisii 










CqOO ]q 






o II '^-»-' th Ii 

„-s>>!ioo§ |g 

pCD^Ttl (UoW 0*00 r-i fd O 

^. D< cc^o So*C* .£.o 



^O llo 

PJ(^3 WO 

;2;u:) Oo 

sNsg 






05.1:5 






^ I|o 

CL) 05J^ 0) 
OCi o< 

■^ 11 -I'^CO 

» o ^^ o o 

m ^ooTToo 
;-i go CO . 

02 II CQO,C 



II |S 

roVo 

•S 0*00 S 

•"• OQOO-M 

. O o 

WCDO 

^lO ii O* 
005 03 «a 

t^ II H*^ 

rJ4 11 Co 
Cq 05 TOO 

^'^•?,o 
^ II ^o 
^ ' o 

^00 r^^ 

coo* "^ 



II 



00 1 1 t- q^ 1 1 <M ^ 1 1 

-^QQoOf!;K(M^0J 

+; ii'^ . iiLo '^ 

«M " 5C) j^ II CO 

*-•<-> oo 



0«0 Ji^O 



<^o oto ^ 



'CO 



-Solas c.^ 

no o;^ II ^oco 



Willis 

^ m tQto 

II ^ ?0 

"S . -5 

<M CD CO (D 
tH cr>oo rj 
o oc<i fi 

^•oco^jt 

C<|00 W 

C WOOD 
•^ ^ ^- CO 

. . f^ 7:00 






II !1 






j-;ao5 00*0 



JIS2 



, orH .g .th^I .:;::: 

>.£J CflO W owe 



«5lO l-.M -._ 
00 CQO-MlO . II 

oco £dSSS'rt> 

II .*=! "5 

-^^Tjoo O ||u.§^^|| 



'. c<i o _i o3 ^ 



I Olrt 



,0 'loc^j n* 
c:> ^U o tH 02 

CSl >>COCD 

' c^ CO to t— vi .11- — • 
o _::,ooo ^ o* . II <^ O* 

o ^- o 00 a C5^ o 10 



TILLING THE ORDER 105 



^^ +J p4 II oJ 0!?!! TO II «>^3 *>^ 02 11 M II lis II 5" W 2 

5| g| ,, «2 «-s III ??2ri^ 3 =^g|: 

s^- 5ii 5§ 'ns? s^ iiii| is% m ■^s -^-.is 

§1 Sp 33 h 11^ »2t^ -^^Siis c,! „SSS 

o-d ^S CO II ^c» rot- 'Sftm ^- ?:3c^Mll *=^T3 o^^<=> 

-^ g- g.^. '^ii 5^ I ^.^iisoj] s^^ syiSii 

!=" ^-S PS ii^..sS^c.-d§o 11-iS.S^S "S^ ^l^>.g 

00 '^ ". OOO -3 11 ^w II »M,«- SI!", ir^r- ^(^ fc>.5^2 



. ooo •rjllJ^wii W II q5 C 11 ". i« • t»i^ >>S ?^ 

«2 COO . 5 . O CI II r^* C IliS -pj OQ W OOO ^t- C-^taS 

s: 2. s'l. g- ^s^^ia* ! «5t;§ goS osiii 



.^<;oii-M_oo j.ooo^ico 5 11" ll^cooo 

i' II II y-^t^ (^ ^^ • p,'-^«£>CO 

^ " " ^ccccco a>co M ooco 

wo2?^T^t>oo >H i;^ ^.- . . . 

/-v rT _u .— s m LLi /->-\ 




^cq 



SSpSj^-gisS =^2 311 111- 






rH CQ C£> tH C^ «D iH 



ooth d rU^.^ II oJ ^ '=^.ai CTii 11^. II II ti ±i 



i>iO CSJO o bfloo II W!^ o<M SI/ llo " II S ^ 



106 A. B C OF FOREiaN TRADE 



4 CO 



^•11 111 

II ft^^ 

» "^fd ft 02 
i OrH llrS 



^3£>*^ 



ft ^^ 
5Q O 






lib- tj(M 

Wcq o 
i^o -o 

go ftO 
-g'Co'-. 



^ ft-*^ 
ftce, > 



02lft J^tH 

QJO Oo 

«o fto 

^•11°^ II 

O ;^o o 
ftf^ioJ-^ 

^ O »s^ • <M k. 

^o .^ "^^'^^aS^Sg 
S^oll ^ II ^S l\^ . 

T^s^^ds->|§iiSiitfe 



c?: 



ft^ 

oo 02'^ -i 



o«>-^ « 

IM .S 

60^ ft^ 



IK- c 

oo H"^ ^iS«« ^^^ ^ ftll 






oOoM+jcooo to 






CO tH (rq ^. . 

o II CO > 




'OoOoo 
^ do«> 



'OooiS 

OOcq 
CO 11 .11 

CO aj M II 
CO ^ N o5 



Tho II g ^ ^5 1' 

r^d w rf ft o w 



t-00 

Xooco 



II 11 ^?J 



ft 






.1 o o 






^ot-us 
O II ooo 

COjHOt- 






ft-B^i^ 

Sh . ,00 

^^dajw go II 



CQIOOO 

IIS II II 



N 



°£u» 






oo;H o"; 

-> ^ CO AS >— ^ _• "■« r 



^v^ oc<i^ ^^ O»^25o'«> 






tj m^ 'O^oX; c <^ . cd .T»Ht- 






°° . • II 

<x>^ o w _ 
CO ft. j2 wo 

|-S..E:II3§« 



:-5 ;; w o 



^>;s>^i? 



siii3l§i. 



uj c3d " M^'^'^ 



ra^l-'la^- 



to 



-;o 






M M) ,CO 

llrrt Nc<l 
02 O I, 

bo > g' w . 
»^ ^'-' bo 






;4 



iico*^ oo5 II t.<^ " II c^w t-cofS obfi^-«:o NM» O'^S 



II 



^ II ^o^ Oco " 5:;<N . 
hflt- tSJ ri< dcq tsi M ^ 



c^u5 tnco*^ obfi^"^ NCO 
^ uo'Oc<i'£ -Soo O I" 

Oooio coO ^ ^1 



-> ^ ftLO ^ 




O C^^ THOSitfl 



FILLING THE ORDER 



107 



z: o "^ o 
>g ;h .CO ^ 

CO +jC<l 



O >4J 

w 2 2 

00 °° 

c^ 2i2<^ 

05 C'^'- 






H^^ 



o; 



>0 C0O5 ^mO-"^ 

^ bJD^oo Q^^o 

O ii O Oi H , 7 '^ 

r>«0 (MO *^ W^ 

:JtH .030 . .oo 

2 o oo WOi 

a rS O* d £ O* 



lili 



«OrH +3 
OO OJ i 
005 g 



II 






pa; 






(MlOO 

crsoo c 

OtHC 



-OCO«i 
5«0t-0 



OOOOOOOOO TH(MCOrJ<kA<C>b»00O> 

mill II 11 II II III! II II II II II II II nil 



rt<00<M tOOS 
t-lOC<3000 



COt>-r 
00"*r 
lOCOr 







eqCOlftb-OOOrHMlO 
U50lj»OlOTH«DrH«0 
'^J^CSCOOOCvlt-iHCDO 


is 


TH<MC0"*lO«O|>00Oi 

II II nil nil II 11 II 

tooooooooo 
oooOooooo 


5OC<jasut((M00l£5T-^00 
T-iT-l<MCOCO'*Lftlft 

11 II II II II ill! 11 il 

rH<MCO'**Hkrt«Ot«00Oi 


lOOloOiAOLOOlO 
lOrHCO<Mt-C000'*Cy> 




d O* d O d o' tH rH rH 





CQ 




iHc<icoTt<u:i<x>t>.oooi 

CqTtt«000OC<J'*<000 


CD 

1 




OSOOt-?OCOW'^CO<M 
WlOOOTH-tit-OtO^O 
OOOrHi-lTH<M(?qC<l 


II II II II nil II nil 

oot-iATt<cqoo5t^io 

COt^iHlOOSCOCOO-^ 
00«OU3COrHOOOt>-U3 


UiOWOlOOlOOlO 
tH iH oq C<l CO CO -* *!»* 

11 il 1! 11 11 n II n il 

TH(MeO"^»X5<OI>-00O> 


1 


OOC^SOlO-^COTHOOi 
05 OS Cr> OS OS 05 Oi OS 00 
T-ICOt»I>-Oi»HCOlOt- 
d d d d d iH r-< rH lA 





(MTtHU3t>-05THCOlOCO 
OOOOOtHtHVH>i-» 

Tt<oo(M«oo"*oocq«o 

''l^OOCOt-C^ICOOlOO 
iHcq^i^LOt-OOOrHCCI 
OiOOt-COlrtrhrttcOiM 

dr-Jc<Ico'^Lodt^od 

iiiiiin 11 II II nil 

iHCqC0'*U3Wt>-00O> 



Hcqco"* 

HCqCO*^ 

?C<>00 

5t-OTj* 

liOOOOt- 

?tH(MCO 



U5<DI>00OS 

linn liii 

?0t-00 050 

uscot-ooo 
ococqooiLO 

OOtH 10*00 C<l 
Tt«U3COt>-00 



rHC<ICO'^lOCC)t>OOOi 



rH tH (M (M CO CO "^ 

c>ooooo>o 
oooo<ooo 
Th 00 cq <x> o Tt< OO 



THcqcoTi<ift<ob-oooi 

nil 11 II II II II II li 

t^"^THooiooq05coco 

COb-rHTt<00CQU3O5CO 
O50000t-«£>«r)lA'<4<"^ 
COt'THlOOiCOt— tHIO 

ooiHiHTHoqcqcoco 



oo 
oo 

(MCO 
-co 00 
-OC^3 
HIM CO 



nil liii 11 nil II II 

tHC<1CQ'<*<U3<DI>»00OS 



108 ABC OF FOREIGN TRADE 



OS 



OH 






o^ 



S2 






Or 



ifOOO 
OiLO 
'(MO 



2^ OOtOrHCX) 
OOLOCO tHOO 



iOC<JC 

o tH era CO eo "*< lo «o eo 



THCSJCO-xftiOOOtr-OOOi 



-H C<1 CO •<!J< U 

nil mil 

OSOiOOOOt 
b-LOcOfH 
Or-l(?q CO 

CO to 05 cq 



co-=t< 



loeo r 



^H<NJCOU5«Dt-asOr-< 



t-'<*ii-HGOiiOCQCi'X>CO 
tHcO'-.'ScOOOOi— ICOLO 

00<X>'^COTHa500?OTj4 
OOOrHTHrHTH(r<JC^ 
OOOOOOOOO THc<jeO'^»i5COt-00O> 

illillllllliniMI IIIIIMMIIIII ill! 

T-4 C>a CO Tt< lO *0 t> 00 0> -rj^ Crj CO 00 M t- tH CD O 
THc<I>«*"L0t>.00OTHC0 
CO«OC7>C<IIOOOC^IOOO 
lO O u:^ iH <jO rH t>^ C<i t>^ 
COfO-^t-rH-^OOTH 
iH tH tH cq Cq C<J CO 



lHC^C0"<t<U3tOt«0 

il II INI III! II I 



<Mcotocr5ooOTHeoI5 
t~-'«i^THoou:»coot-^ 
cot-«£>'«d^co(MTHcr>;;^ 

CO t- rH lO Cr> CO l>- O . 
<O(M'aSLOT-H00rJ<TH5j! 
THCO'oJ^Cfi'OOOiTHCOT 



II III 



tH C<J CO -* U5 <;D t- 00 "• 



tH Oq CO rti lO «o t- 
CO C<1 OO -xl* o to C<1 
O tH rH Cq CO CO 'rtl 



ootH 



OOOOOOOOO 



THc^co-^Lfttnt-oooi 



rHoqco-^ u:) 
cDc^qoc^o 
oo ir-io-^co 

CO t-THLQOS 



CD O-O 
CD 03C 
tHOO 

CO t-c 



o>oooooooo 

OOOOOOifDOO 
0500t»CDlO-«*"COCslTH 

u:)THt-cocriiniTHt-^co 
c<i u;5 1>^ o (?q' in oo' o c-i 

tH tH tH tH C<J C^ 

II nil II II nil II II 

iHcqco-'t^tcjCDt-ooCi 



OOrHTHiHC^qcslCOCO 





rHC0'<*"l0t-00a5OC<J 

cDcqooTiHOcD<rqasir5 

COt-CD-^GOiHurSOOtM 
OOCDlOCOrHOCCCDLO 




OiHCqcO'^tiLOLOCDC— 

nil II INI II nil It 

rHcqco'<^>ocot-ooafs 


rHCqCO'^mcDb-OOCT) 

11 nil 11 nil II II 11 

O O O Oi C7i 05 05 Q5 Oi 
CDC<lOOCOa5lOTHt-CO 
OCOOOOOt-C-t-CDCD 
rHCOmt-OSrHCOlLOt- 


5H* 




rHC<JCO'^U3t"-00050 






rHC<JCO'<!t<CDt-00050 
OOOOOOOOt-H 
THC<IC0'«*<u:5CDt>.00O> 



tH cq CO "^ lO CO t- 00 Oi tH <>q CO Tt< U3 CD t- 00 o> 

ft II II II II linn 11 II II II II linn iiii 



OOCO 
OrH 
C5 00 



co';*^ 

C<lCO 
t-CD 



LOCD 
OOO 



t^ooos 

CDt}<(M 
lOCD t- 

coirqi 



OiHCqCOTiHlOCDC^OO 







cocoasc<jtot-oeoco 

t-xt*TH<ncDC0iH00U5 

iCTHt-cqoo'«i<omiH 




T-IC<ie0'«*'"3CDt>-00O> 

IIII nun linn n 

LOOTj^CTS-nt^'OOCOOOCO 
iHOq-rtHLOt-OOOr-ICO 

oocD-rt^cqooob-inco 


OOSOOOOC^t-t-CDCO 

cqioooTH-x^t-ococo 

tH tH iH C<l <M C<| 

nil nil 11 linn w 




COC-THiOOiC>qCDOrH 
COCDOCOCDOCOt-O 
OOrHrHTHcqcqC^CO 




p- 


OOOOOOOOO 








CDCOOilOiHOO-^OCD 
rHCO"^CD0005rHCOrH 

cocDCJscqLooooqiooo 

oo' Cd' '*' CO iH OS oo CD Tjl 

cqiOOOiH-^cDOscqin 

tH iH tH iH C<1 C<1 

II IIII n IIII n nil 

THCqCO'^UOCDb-OOOi 



rHCO 
CO CD 
Irt o 
cot- 
oo 



CO -* lO CO C- 00 Ofc 

II II II 11 illlll 

CD<M t-C^lOOCOOS 
"rt< CD C- 05 O Cq CO 

OS cq in oo oq to 00 

lo th CD th b- cq t> 

O ^ t- tH "«»< oo tH 
tH iH rH CvJ Cq C<I CO 



oocr>oooooo 







CDc<^oou^r^^-coaslrt 


"^ zn 




CDC0O5CDC00>C0C<10» 


""1 f^ 




cr>Oioooooot~t-t-«o 


-2 o 




CDCOOt-'^t^iHOOinca 


^•t: 




COt-rH'^00(MUOOCO 




THc<ieo"THmcob-ooC> 


rH rH iH cq cq cq €*» 




II IIII 11 II II null 


Illlll linn Illlll 


'd 


cqTj^int^osrHCOTt*^ 


th c^ CO ''•^ to CO t- 00 oa 


-jw 


lC»OinoiOrHCDTH«5 




E^ 


Or-<THcqcqcocO'rt<'* 




t--^7H00lOC^O5CDC^ 




oi^ 


cqiOOOOCOCDOOiH'^ 






O o' o' rH tA tA rH cq' <^ 







t-rJHCvI05CDC0O00l0 






CDCOOCDCOOt-COO 






OOt-CD'TlHcOC^OOiOO 




a! 


COt-THL005COt-0'^ 




^ 


CDC^05lOTHOOTtirHt>» 




iA 


THCO-^CDCOOSrHCOrtt 
OOOOOOrHrHrH 






OOOOOOOOO 


tHcqcO-^^^CDt-OOO 




IIII IIII II IIII n II 


II 11 IIII II nil nil 




rHCqCO««fU5«iI>OOOS 


Looioo»^oioom 


o 51? 




c^imt-oc^qiot-ocq 


.^ CO 

^ Si 




OOOrHrHTHrHCqC^I 




THOqCO-^>^CDt-00O> 




CDCvl 00-<4<OCDC<lOOTt« 




iH rH Cq CO CO ''I* -^ "5 



FILLING THE ORDER 



109 



B N 



> o 






SE 






iHe<iw^iA«ot-ooos 



OOrHr-lTH(MC<)C<JeO 
OOOOOOOOO 



COCOOcOt-O-^C^r-l 
00 Cr5 Irt CO r4 O 00 CO Irt 

c<ju:)OOTH"^t^a^c^io 

II ini nil II II nil 

TH5<ico'<t<ia<ct-oooa 



iHC<ICOT*«lO«5t>.OOOi 



III II INI 



THTHCqcO-^xfLOCDC- 
LOC>K30tftO>lOOU3 
iHC0'^C0t-O5O>(MC0 
<M-^«)000(MlOr^Oi 
C0«DaiC^«£>O5(MLO00 
OOO'MiHrHCaCCKM 

OOOOOOOOO 



e0t-O"^t-rHM*00rH 
C>O)'tHTHTHC^q<MC0C>0 
TH(MCC-^l^<Ot-OOC3i 

1H C<J CO -"^ lO CO t-^ oo* oi 

eO«OOi<MU200iH"«*<t>- 

tH rH 1-1 oq (M (M 

II II II II II II II II 11 



iHCJICO'^lOtOb-OOO 

nil mill II III! II 

rHTHC^(MeOrt4"rt<in)lO 
CqTj<COOOO(MTj<coOO 

t*r**THOOCOCOOt-'^ 
WrHt-CMOOTfOlOr-l 

ojioc^ocqiooooco 

OOOrHTHtHrH(M"c<I 



O^OOt-t»COiAU3'<«< 

t>.^COTHCit-iniCOTH 
OOt^COLO'coOQiHOO 

oot^<oir5Tj<eoc<iTHos 

CO t- iH LO OJ CO* t> tH TjJ 
tH tH tH <M CO CO CO 

nil II nil II II nil 





01 

1 


0500t-tO»J^"^'>3rHO 
t>U3COr-lCr5t-U3COTH 




•^Oi-<t»05eooocoooco 

COCOOSlOCaoOiOrHOO 
OrHiHC^COcO-^irStO 




OOOOOOOOO 

nil II nil nil n ii 

rHCOCOTt^lOCOt-OOCS 


"»HC<IC0'«*<lOnOt-00Oi 

II nil nil INI nil 

'^'t-iH^OOiHU^lOiCq 
(NlTfC-a>r-(Tt<CO00TH 

cocoa5C<icoo:)oqio05 

'<tiOOCqt-rHU30'«*<00 


Pi 






utiocor-(t>-<rqoocooo 
THco'^«c>i>asoc<ico 

iHt-ItH 



oco-^ 



00 00 
CO o 



lOCO 

coco 



t-co 



HC<ICO"*K3«£'t-00ai 

INI nil II nil n ii n 

H CO "tH >-^ CO OO 05 O tH tH 

SOLOOiaOLOr-iCO 

Ot-O'^C^T-S-^OOrS 

■HCOTttLOCOOOCjOCO 

-IC^cO-^lCCOb-OiO 

6 o' o' o o o d o* th 



00 1^ CO in: "<*< cq T-t 

TH CO CO -^ lO CO 



S5 
II II 



ro O 



«o«o«oco ?o 

OOCOCOO Tfi 
CO 00 CO 05 ""l^ 
CO TjJ t-* 0> CO 



CO CO CO CO CO 
en tr- 1-i lO <7> 
OU^tHCOiH 



^ cocoo-^ 

^U3OC0iH 

_j t> o' co' la 

^rH CO CO CO 



-., CO CO CO CO 

rrt-T-tusoj 
l; CO 00 CO 00 



CO "^t- OS CO 



CO _J t> OS CO Tt< 
rH ^rHrHCOCO 



OOOOOOOOO© 

t-THlOO5C0 
t- CO 00 CO OS 

1H Tt< CO OS* r-I 



■^ -rj* Tt< ^ rt< 

cooo-^oo 

U3 O CO rH ^ 
rH Tt< CO Os' 1-4 



OOOOO 
t-THioOSCO 
CO 00 CO 00"^ 
tH CO* co' o6 tH 



^0<i9C0?0^ 
r-|lO0SC0t- 
OU3o<OtH 
tH CO* CO 00 lH 



COCCI CO CO CO 

COO-^00 CO 
t>- CO 00 CO OS 

dcoirsodd 



oooooooooo 

OTfiOOCO CO 
IlO O lO tH «0 

d CO wj 00 d 



LOCiCOt- r-( 
CO t- CO 00 •<:*< 

cocouot-d 



OOOOO 
•*f OOCO CO 
li3O«0iH 



jy. 00 00 00 00 

r^THicosco 

^ O U5 O CO 
-J t^ OS* CO -^ 
3r-lr-IC<IC0 



^coo-^oo 

^t- CO 00 CO 
_J CO CS iH Tjl 
3^T-lCOCO 



-y: CO OS th <<*< 

^iHtHCQCO 



-^* CO 00 tH CO 
^tHiHCOCO 

CO CO CO CO CO 

COO'^OOCO 
M'OIOOCO 
co' co' 00* T-H CO 
iHiHrHCOCO 



oooooooooo 
o-^oococo 

CO t~ CO 00 CO 



■^ rt* -^t* -^ "^ 

IOOSCOC-tH 
OJTttOlOrH 



OOOOO 
O-nt'OOCO^O 

t>-co t-cooo 



110 A B C OF FOREIGN TRADE 



COOb-'^iH ■ 


oou:)(Mcy5?o 


e* 




» 


TjHOOr-lLOOi 


C<1 ^ocot^ 




rt 


LC5 Tt^ -rft CO (M 


C^tHtHOOS 




o 


CO t- tH lO C5 


CO t- tH lO 00 




H 


O 'tHtHtH 


CQ* <M* CO CO CO* 






o 










OXI^JfOOb- 


tHtHOOIAC^I 


§o 






Tt^OOJM ZOOi 


CO t-OrHCO 


23 


TO 


iHOOOiOO 


00 t-t-CDlO 




CO t^- tH Tt< CO 


C<lCOO"<d^OO 






O * rH 1-5 r4 


cq c<i CO* CO* CO* 




t5 




liSC<l<M«DcO 


Ot>-rt<r-<(^ 


03 ft 


1 


M 


lo as Ci «x> o 


M< t-rHLOOO 


ce 


?:! 


t> cr» <:£> LO LO 


rti CO CO C^ iH 


0) 


O 


Cq «p O '^^ OO 
O * iH r-5 tH 

C<JO>«OCOO 


cq <:o o TH oo 
w cq* CO* CO* CO 

t-Tt<TH00ur3 


•4-> -4-> 


02 


§ 

h:1 


<X> Oi CO t^ T-t 


'^ CO (M LO CO 


p 




CO C<i (SI iH T-i 


OCiO>OOI>« 




cq •X' o TtH 00 


Ol LO CS CO t- 


tl 






O 'iHth't-I 


ca c<i cq CO* CO* 


M4J 




ooiatsiCito 


eoot-"«*«TH 


l| 


ft 


05 

Q 


COO-^ t-rH 


looser coo 


Oi o3 


Oi OiOO t— t^ 


COlOiOTt<TdH 


OS CQ 




H 


THLOOiCOt^- 


tH LO CS CO t- 




P 


O ' 'tAtA 


c<i cq* cq* CO* co* 


15 

CD 


g 


1 


THrH00lOC<| 


05<iDeOOl> 


p 


TO 


t-TH-^OOcci 


ioa>cot-o 


*^ 


<{ 




K5LO^COeO 


CqTHrHOO 




tHiaOiCOt- 


lH lO Oi CO t- 


•SB 




O * *rHr4 


cq c<i c<i CO CO 

«DCOOt--rH 


TO 

1 




00THir5Ci<M 


CDO-^t-TH 


Oi 


s 


iHtHOOsOS 


oo oo t- «£> i;D 


<D 


tHiO OiC^ «c> 


o TH 00 cq (^3 


O 5h 


H 


O 


O ' * tH tH 


(M'oQcq'coco 


TO 


t-'*iH00lO 


(MOi^COO 


'^>» 


O 


2 


oo<M<:£>a5CO 


t>OTftOOC<l 


2^ 




t-i>. cr>LOU5 


"^^cocqcq 




O'^oocqo 


O TJH 00 C<1 «D 


^ 




O ' 'r-irH 


ci cq cq* CO CO 


BSm 








dJ bflo 






COOt-THrH 


ooiocqoico 


abov 
endin 
his b 


M 


Oi CO c£> cr> Tt< 


t^rHlOOOCq 


Eh 


H^ 


COCOC<lC<J tH 


iooasoooo 




OTt<00c<j«0 


O "^^ t>. tH LO 


1 


CQ 


O * 'jAiA 


cq* cq* iH CO CO* 


5S« 


1 


OfTHrHOO 


to C<J OS CO CO 


o <1> 


O 




COt-TH'T*< 


oo cq ui as CO 


I 


05 00 00 t- 


COCOlOrttrt^ 


tQ-S-S 


m 


COt^iHlO 
O *iHtH 


OSCOt-rHLO 

T-i c<j oq CO CO 




M 

tf 






?^ 










fl^ 








% 










o 








o 


m 


oooo 


ooooo 




'd 


»H(MCOi^ 


lOCOt>00Oi 








CO) 




2 











TttOOCOt-rHlOOiCOOO 

cqTt*t-05oq'<:t<«oaiTH 

cocooscqcocnicqifflOi 

t-^rHOSCOCOrHOOlO 

cot-TH'?tH00C>q<;oa>co 
OOrHiHTHCqcqcqco 

ooooooooo 
ooooooooo 



ooooooooo 



p-TttC^asCOTHrHOOCO 

cocoo«ocoot-coo 
cot>-THTtioocqtoasco 

OOrHrHrHC^cqc^JCO 

ooooooooo 
ooooooooo 



OS0000|>.«fi>lirtlAr*<eo 
C>THt^CO'^"''^t'M 

C0t-O'rttt^^L000C<| 

ioo<X!TH^<^l>-cqoo 

'^OSCOoO^t-iHCOO 
OOtHth'^^^TWJCOtJ* 

c:>ooo^'^<^oo 

O-OOo^^OOO 

o o o o "-^ '^ o O o 



OOOOOOOOO 



C0«00>THrHl>»OC0<0 
rtH00Cqt>THi0OTt«00 

THCq-^Wt^-OOOrHd 

■rHoqco'*tocoooas<o 
rtioooq^OTj^ooc^ib- 

OOrHr-(Cq!?qC<JCOCO 

ooooooooo 
oooo>ooooo 



COCOOStH'^O'OCOCO 

'*oooqt-'^»j^o-«*ioo 

■^OJCOoo'^t-'^'Mtr-rH 

"^oocot-c^cDiHLrao 

0>OTHrH^<^<?^COTH 
OOOo'^'^OOO 

oooo*-^<=iOoo 

0*000*^0000 



OOOOOOOOO 



looifto'^^oifloua 

07HTHc^<>'COCOrt4Tj4 

ooooooooo 
o O O o *^ o o o o 

oo*oo®o'o'o*o 



cocooic<icooicqtoa> 

t-"^ r-l as CO CO tH oou:5 

cot-rH-^oocqcoasco 

0*rHTHTHC<icqcqeO 



cot-o'^t-tHiooocq 
ir30coTHcooqt>c<joo 

M<05cOOOC<lt-TH«00 
O O* T-i tH Cq c4 CO CO >*< 



cqioooTH'«*<t>oc<iijO 

C>q^?Ci05THC0C000O 
00CO-^C<lTHOSt>-lO'^ 



tH Cq €0 ^ US CO l> 00 OS 



OOCOCO'-<O^I>'"^<?<10 

c<iu:iooT-ico«oo5c«qio 

lOOiOiHCOr-ICOC<lt- 
T-tCOrtiCOt^OSOC^ICO 

w*<c©ooocq40t-o> 
T-5 cq' CO "*<< <o t- 00 oi o 



FILLING THE ORDER 111 



t>-rt<THoou::>coor>-Tt< 
_ Or-ic^c^co-^iou-:;?o 

OOOOOOOOO OOOt-CDlO-^COC^lTH OOOOOOtHtHiH 

OO'o'oOOOOO OiHOaCO-^li^^Ct-OO »-HC<icOrtiU5?£5t^OOoi THCQCC^lO^Ot-OOOS 



Oi-IMCOrJHLfScOt-OO CvJLOOOrHrtit-OC^JO Tj^OOC^COrHLOOiCOt- 

C)00000000> C5 OO t- t- <X) Ut) lO -^ CO OO «0 LO CO (M O OO t^ LO 

000000000> OOt>-<^LO"^OOC<JiHO 05Cr>Oi050505000000 

OOOOOOOOO OrHCC!COTjHlO«dt-^od rHC^CO^ia<©b-00Ci O tH (M* CO ■^' »0 «> t> 00 



Cq-ffeOCftrHCOCOOOiO 
OOOOiHTHrHr-IOq 

iHc<jco'^w<xit-ooa> 

r-< <M CO -* Uti «r> t> 00 Oi <M -^ <r) 05 rH CO O OO O 

OOOOOOOOO CQ -^ «r> OO O d Tf <0 00 O O O O 1-1 tH r^ t-H C<J 

OOOOOOOOO lHCqc0rt<«0C-00C5O iHC^C0"^lO«Ot-0005 

OOo'o'o'oOOO tHMCO^lO^t-OOOi tH cci CO '^" "5 CD t-^ od O r-i C<i CO* Tt< U5 ^ t> 00 OJ 



00 t* U3 -^ C:> r-l Oi O CO ITS 05 ■^ 05 rt< OO (M OO c<i 

rHCOlOt-asiHOqCCUD 0>OTHTHCqCQCOCO^ 

t> TjJ i-I oo" lO CO O t> "^ CO ccj oo' rt< O* CD <^ OC T^ OOOOOOOOO 

lH W CO ^ lO <0 t- 00 OS O tH Cq cq CO "^ lO Ut! CO -M CO -* CO OO 05 i-l <M tJI OOOOOOOOO 

Oi OO C>- CO lO -^ CO CvJ rH O) O O 0> 0> O ''^ rH tH O O 0> O O O O O O 

rHCqC0''J<lO«Ot-00 iH C<J ©0 "^ US ^D t- 00 oa lH W CO tMO CO t- 00 Oi 



c^'^i^t^asTHeocoooo 

<OC<J00Tt<rHt*C0O5CO 

Tt< Oi CO OO CO t- C<1 CO tH C<J rj< I>. 05 tH CO CO 00 O 

.•-^ (-~i __i ■m-j r<i rsT (-»^ /N»i •^?+4 ■ *(-! ^-1 /•^ ^^ r •_ ^,^ ^-^ cz-v 



TWJC^i-^t^si-^t-'^j*^-'!— I c^^S'c^Osr-ICOCOOOO 

OOtHtHC^IC^COCO"^ «OC^OOrt<TH|>COCJiCO 

^.^.«^.°°<=J^.-n^.°°. OOOOOOOOO 00000-- -^•-.•^••^•^„-„- : 

OQ -^ CO 00 T-i CO lO t- Oi <OOOOoOOOO •'fOOOClCOO 

iHiHTHrHiH OOOOOOOOO C<l"^tr-aiC<l^— — t-> ..-^--^>,^ 

Csj-^^ooo ca'^cpoo c<iTticooo 



OC<J'^COOO rHCOl^t-O rH CO ITS t- Oi 
tHtH'-ItHc^ tHiHiHiHtH 



05 00 t- CO t- to Tt< CO CO O tH »> C<I 00 CO Oi rf* O C<l •* t- 05 iH CO *^ 00 O CO CO C5 tH O t> O CO CO 

t- U5 CO T-l CO t- ITS CO tH lO tH CO Ca t- CO 00 "^ O C<I ■<*< CD OO tH CO LO t- o Cq •^ CO as lO CO CO oo o 

CO CO O t>. 05 O t- Ti< tH • • . 

- O 1-1 r-( C<1 Cq CO CO rt< lO Cq Tf CO 00 tH CO l^ t- O Oi 00 t- CO t>- lO rl< CO CO 

C0COC?iC^ir500rHTM>. Cq'<fC000T-!C0'^t-O t-LOCOT-iCCt-lOCCi-H 

•^ oo c<i !>• tH LO o -^ oo t- -^ th 00 ;o CO O !>- lO CO CO O t> 05 O tr- rfi tH 

c<i"«!*<t>cs cqiooo c<jiAoo 

CdTftC-Oti^ O CO CO Oi tH Tt< OCOCOOOtH-^ 

tH tH tH r-( Csl T-l tH 1-1 rH CQ cq tH i-H tH lH C<I<M 



112 ABC OF FOREIGN TEADE 

necessary for the purpose of calculating the 
freight you must always give these measure- 
ments. Don't fail to be exact. 

GROSS AXD NET 

After you have gathered all this informa- 
tion mark your case, giving the designating 
marks which your customer will indicate in 
his order ; if he does not prescribe any mark- 
ing, put your initials in a triangle or circle, 
and always mark the destination prominently 
and clearly on the case so that the steamer 
people can at all times see where your case is 
going, in the event of its being hauled up in 
some port. Show the gross and net weights 
and the measurements of the case, and if it is 
a large case give this information on at least 
two sides. If you have a number of cases in 
the same shipment, number them from one 
up, or use such numbers as your customers 
may direct, and be sure your marking is done 
in such a way that it will not rub off. 

As you have your money for the goods, yon 
may feel perhaps that you are not responsible 
for any breakage en route. Legally you are 
not responsible, but don't forget that if your 



FILLING THE ORDER 113 

shipment arrives in a broken or damaged state, 
your customer who suffers in consequence will 
blame no one but you. And while he may have 
no legal recourse against you, he will certainly 
not regard you or your product with favor, 
and you will lose his future business. As you 
have gone into this business for the very pur- 
pose of obtaining 'his orders, it is well that 
you remember this and pack as carefully as 
you possibly can to prevent damage or break- 
age, and consequent loss of future trade. 

In this connection the following article on 
*^ Marking Freight for Export" will be of in- 
terest (courtesy The World's Markets) : 

MARKING FREIGHT FOE EXPORT 

^^The proper marking of export freight is a 
much more important matter than most manu- 
facturers seem to think. It is not a detail 
which should be left to the discretion of the 
packing-room or shipping clerk, but explicit 
instructions should be given covering every 
shipment. The sole object of export marking 
is to enable freight handlers and customs em- 
ployees to locate and easily identify the pack- 
ages. It should be borne in mind that freight 



114 ABC OF FOEEIGN TRADE 

is often handled under conditions making 
plain, characteristic export marks an absolute 
necessity. 

"Ships often load and discharge at night, 
and at best it is difficult, on account of imper- 
fect lighting, to identify packages on the piers, 
in the holds of vessels, and in the lighters. For 
these reasons it is most desirable that goods be 
marked and numbered plainly and distinctly, 
so that the tally clerks can easily recognize 
them. Often the customer's order will carry 
instructions as to how he wishes his goods 
marked. If so, these instructions, or those the 
manufacturer may receive from the forwarder 
or commission merchant, should be implicitly 
followed. 

"Each package should bear a serial number, 
unless every package is of the same weight 
and has the same contents, when numbering is 
unnecessary. Some countries require that 
marks be stenciled, brush and all other kinds 
of marking being expressly prohibited; other 
countries require that packages be marked 
and numbered on two sides. If the manufac- 
turer does not receive specific instructions as 
to marking and numbering he should ask for 



FILLING THE OEDER 115 

information from the forwarder or commis- 
-sion merchant. It is well to mark each pack- 
age with the gross and net weights, also the 
cubic measurements, being careful that this 
information also appears on the invoice and 
packing lists, so that the ocean bills of lading 
and consular invoices may be prepared cor- 
rectly. 

*^One of the commonest mistakes made by the 
average manufacturer in marking his export 
freight is to put on entirely too much. The 
consignee's name, street address, city, destina- 
tion in the interior, and often his post-office 
box are spread all over the case, while the 
export marks called for in the order are fre- 
quently obscurely printed in a corner with 
blue pencil, marking crayon, or on a paper 
tag, which frequently gets torn oH before the 
goods even get on board ship. In addition to 
all this unnecessary and confusing marking, 
which is usually illegible at a distance of 
twenty feet, the balance of the available space 
is taken up with the name, address, etc., of the 
forwarder or commission merchant. Still fur- 
ther to add to the muddle of marks many man- 
ufacturers cover a large part of each case 



116 ABC OF FOREIGN TEADE 

with, cubic measurements, weights^ their own 
address, the contents of the case, and more or 
less advertising. 

^^A case properly marked for export should 
have nothing whatever on it to indicate what 
it contains. It should be marked in such a 
manner as to be readily identified on a pier, in 
a dark ship's hold, on a lighter, or in a crowded 
custom-house containing thousands of other 
packages. The name and address of the con- 
signee should rarely be used, but instead, dia- 
monds, triangles, squares, and other marks 
combined with the consignee's initials, should 
be employed, with the name of the foreign port 
underneath. These marks should be at least six 
inches square, and larger if possible — ^the 
larger the better, so that the package may be 
readily distinguished one hundred feet away. 

*^In view of the possibility of a package 
going astray it is well to have the manufactur- 
er's name and address in small, plain lettering 
on the reverse side, but the full name of the 
consignee should be avoided, not only for the 
reasons mentioned, but as a means of prevent- 
ing rivals from ascertaining to whom the 
manufacturer is shipping." 



CHAPTER VIII 

Sample Orders 

A number of customers in the beginning 
will give you sample orders merely to 
get acquainted with your product, its quality 
and value. These sample orders should be han- 
dled by you with exactly the same care, both 
as to filling and packing, as we have recom- 
mended for your regular merchandise orders. 

Don't forget that the sample is the most 
important pioneer in any business, and bear in 
mind that your customer, who is thousands 
of miles away from you, judges your merchan- 
dise and places his order on the basis of your 
sample; therefore the goods eventually 
shipped must absolutely match the sample 
and be equal to it in quality and fin- 
ish. If you supply goods which are inferior 
to the sample you sent, your customer will feel 
that you obtained his order under false repre- 
sentations, and, of course, this is a very; 
serious matter. It is not necessary to send out 
samples unsolicited, but at the same time give 

117 



118 1KB G OF FOREIGN TRADE 

every order for samples the best attention pos- 
sible because the sample may be the forerun- 
ner of some really big trade. 

[When sending your samples, number them, 
give each a code word, concerning which you 
will be instructed in a later chapter, and all 
information as to price, variety of finish, etc., 
which it is possible for you to give to convey 
to the customer a definite idea as to your 
product. As explained before, the customer 
'has to figure the landed cost, and for this rea- 
son it is necessary that you tell him how your 
goods are packed; that is to say, so many 
dozen or hundreds or pieces per case, or box, 
giving their weight, net, legal and gross, and 
their measurements, all of which has been 
quite fully discussed in the preceding chapter. 
Use the mails for shipping samples, whenever 
possible and practical. 

^ iisrvoiCES 

"When invoicing American merchandise for 
export, bill your goods exactly as you 
would for this country. However, include the 
fullest possible information as regards weights 
and measurements of the goods shipped, and 



SA^IPLE ORDERS 119 

a detailed description of what you are ship- 
ping and how shipped and how goods 
are marked. Otherwise^ the invoice should 
be made exactly as you make invoices at home. 
All invoices should be made in quadruplicate, 
and in addition to the regular billing of the 
merchandise and should always show the fol- 
lowing : 

a. The discounts for cash and your terms 
of payment. 

b. The gross and net weights of each case or 
package in lbs. and kilos. 

c. The contents of each package. If liquids, 
specify amount of liters, gallons, containers 
and alcoholic strength. 

d. The measurements, L e., width, length and 
height, of each case or package. 

e. The marks and numbers as given on the 
forder. 

f. When contents of ease are packed in 
wrappers, tins, cardboards, boxes, etc., the net 
weight of each class of goods must be given, 
including wrappers (legal net weight) and* 
without same (true net weight), as already 
explained. 

Make separate invoices for each order num- 



120 !^ B C OP FOEEIGN TRADE 

ber and mark. If miscellaneous goods are 
packed together, the separate legal and true 
net weights of each article must appear on the 
invoice. 

Eemember that your customer probably 
pays his duty on the basis of your invoice. 
Therefore, be exact and give in plain language 
all the details of the merchandise which 
the invoice stands for. It does not cost 
you anything to be explicit, and it may 
save your customer a lot of annoyance and 
expense. Mention everything that is in the 
package, whatever it is, on your invoice, 
whether you charge for it or not. In some 
countries the duty has to be paid on catalogues 
and if you will make it a rule to show on the 
invoice everything that is in each case, whether 
it is charged for or not, you will find that you 
will not have gone wrong, and you will be on 
the safe side. 

Your invoice should also show the marking 
of your cases which must be exactly the same 
as those on the cases themselves. 

Show the cost of crating or boxing, cartage 
from factory to station, and freight from the 
local station to point of shipment. Even when 
you quote P. O. B. steamer and these charges 



SAMPLE ORDERS 121 

are included you should show them on the in- 
voice. While this is not required in all coun- 
tries, it is necessary in a number of them, and 
if you make it always a part of your bill you 
can not make a mistake in the matter. In this 
way the actual cost of the goods is shown, but 
also all charges in connection therewith. 

It is customary in foreign trade to sign 
all invoices, that is to say, a responsible officer 
of the company should sign the invoice just as 
you sign your mail, A separate invoice should 
also show the cost of packing, ocean freight, 
and insurance. In this way the customer who 
needs these charges for duty purposes takes 
both of your invoices to the custom-house, the 
one for the merchandise and the other for the 
packing list, showing the contents of the sev- 
eral cases, weights, etc., to your invoice. 

Always make up five invoices. The bank, as 
you will see later, needs two, one should go into 
your file, and two should go to your customer, 
one by the first mail and one by follow-up mail 
as previously explained, just as you send fol- 
low-up letters, so that he is sure to get a copy 
of the invoice in case the first copy sent does 
not reach him. 

Of course when you wrtte out your own in- 



122 !^ B C OP FOEEIGN TEADE 

voice you naturally always include the follow- 
ing information: 

The date of the invoice. 

The date of the order. 

The date of the shipment. 

Your order number. 

Your customer's order number. 

The terms showing whether you ship your 
customer C. O. D. or draw on him, or give 
him terms. 

Further, you will indicate whether you 
shipped by express, freight and by what 
railroad, and, of course, you should likewise 
put on your foreign invoice whether you 
shipped through a forwarder ( if so, give his 
charges. Always attach a duplicate of the 
name and address) and by what route (give 
the name of the steamer whenever possible.) 

The data ordinarily on your domestic in- 
voice should also be shown on your export in- 
voice in addition to the data already mentioned. 

THE SHIPMENT 

Now your goods are boxed, your bills are 
made out, you have your license, if you need 



SAMPLE OEDERS 123 

one for the country to whicli you are shipping, 
and you are ready to ship. As soon as you 
receive your license you endeavor to expedite 
your sample or merchandise order to the coun- 
try in which your customer is located. There 
are four agencies with whom you may deal in 
the matter: 

The Post Oface. 

The Railroad. 

The Steamship Company. 

The Freight Forwarder. 
You need not be concerned about the matter 
of shipping. There is nothing about it that is 
either mysterious or difficult. 

As far as samples or small parcels are con- 
cerned, Uncle Sam is always ready to help 
you. If you have a small shipment to make 
that exceeds the parcel post maximum in 
weight, it is cheaper to split it into two or three 
parcel post shipments than to send it by 
freight. 

The post office takes very good care of its 
shipments and so do the steamers which carry 
the parcels for the government. It is really 
the best, safest and most satisfactory way of 
forwarding your samples and small shipments. 



124 :A: B C OF. FOEEIGN TRADE 

By registering these at a nominal additional 
cost you will not only get a receipt, but you can 
call for a return receipt, which will be signed 
by the recipient in the foreign country and re- 
turned to you, so that you will know your 
samples, or parcels, have actually been deliv- 
ered. The post office, therefore, should be 
given first preference for shipping samples or 
small merchandise parcels. Your local post 
office or the Post-Office Guide will give you all 
necessary information as regards ways, means 
and cost. It would not be practical to repro- 
duce these here, as they are subject to change 
at any time. Moreover, this information can 
be obtained in any post office, be it ever so 
small, without trouble or inconvenience. You 
will only have to be careful, at the time you 
consult the Post-Office Guide or the post office 
in your town, that all the changes and regula- 
tions are at hand so that you really get up- 
to-date information. 

The Guide gives you information on all of 
the following subjects: 

Postal rates for letters, postcards, samples, 
printed matter, composite packages, parcels. 

All regulations for foreign mail. 



SAI^IPLE ORDERS 125 

Prohibited articles, especially with regard 
to special prohibition in various countries as 
to articles excluded from the mails in this 
country as well as those excluded from the 
mails (or only accepted under certain condi- 
tions) from foreign countries. 

Custom duties on mail or parcels in foreign 
countries. 

International parcel post. 

General information, suggestions and in- 
structions. 



CHAPTEE IX 

Tkansportation 

Next is the Railroad. You deal with rail- 
roads in shipping merchandise in this country^ 
and you are therefore acquainted with their 
methods. The railroad documents are filled 
out in the usual way, just as for domestic 
shipments^ and the goods are handled in 
the same manner. The railroads now have 
foreign freight departments and you can ap- 
ply to them, or write to them, and obtain any 
information desired. To some destinations 
the railroad will issue a through bill of lading. 
In other words, the railroad will receive your 
merchandise and give you a bill of lading to 
China or to the Argentine, just as it would 
give you a bill of lading to San Francisco, or 
Jacksonville, Florida. In that case, just as in 
your home business, you have nothing more to 
do in the matter. You can actually forget all 
about it. It is a simple and satisfactory way 
of doing business, and your through bill of 

126 



TEANSPORTATION 127 

lading, which takes the goods direct to their 
final destination, will relieve you of all further 
work or responsibility. In this case, the goods 
leave your home town, and the railroad, hav- 
ing booked the merchandise to China, instructs 
its agents at the port from which the steamer 
sails for China, to book the necessary space for 
your merchandise. Then when the trains 
bring your merchandise to the port the rail- 
road agent accepts delivery of the merchan- 
disC; has it taken down to the steamer, ships it, 
and you have nothing further to do in the 
matter. 

STEAMSHIP 

Next is the Steamship company. If the 
railroad company will not issue a through 
bill of lading, you go to the steamship com- 
pany whose steamers sail to the country to 
which you wish to ship. The steamship com- 
pany will book your freight just as the rail- 
road company will, but in that case you have 
to deliver the merchandise to the steamship 
company's dock, in the port from which the 
steamer sails. In other words, you ship the 
goods by rail to the port and have your local 



128 ABC OF FOEEIGN TEADE 

agent, or anybody whom you appoint as your 
agent for the purpose, take charge of the 
merchandise when it gets to the port and de- 
liver it to the steamship company at the dock. 
Your agent, therefore, would perform for you 
the same service which otherwise the railroad 
agent would have performed for the railroad 
company, with this difference: In the first 
^ase, the railroad company would give you, 
in your city when you deliver to them the 
goods^ a bill of lading through to China, and 
its agents would do all the rest. In the 
second case the railroad company would 
give you a bill of lading only to the port of 
shipment, and deliver the goods there to 
your agent upon surrender of the bill of lad- 
ing. Then when your agent delivers the mer- 
chandise to the steamship company he will 
receive the bill of lading to China, which he 
should transmit to you. It is most important 
when you ship in this way, to do three things : 
First, you must mark your bill of lading 
*^For Export''; second, you must mark the 
shipping bill directing the railroad com- 
pany to notify your agent of the ar- 
rival of the goods, so that he can take imme- 
diate action when the merchandise gets there. 



TRANSPORTATION 129 

Whenever goods are shipped either to your 
order, or anybody's order, or simply ^Ho or- 
der," and you state on the bill of lading that 
the goods are to be sent ^^care of somebody" 
or ^^ notify somebody," that somebody will al- 
ways be advised by the railroad or the steam- 
ship company when the goods arrive. In 
other words it is always necessary that you tell 
both the railroad and the steamshii) company; 
who is to be notified of the arrival of the mer- 
chandise at its bill-of-lading destination. 
Thirdly, don't neglect to send the railroad 
bill of lading to your agent properly endorsed. 

RAILKOAD Bn.L OF LADING 

A railroad bill of lading is like a check. It 
must be endorsed before delivery can be se- 
cured. As shipper or consignor of the goods, 
you get the document. Nobody else can get 
the goods, except the party bringing this bill of 
lading to the railroad company with your en- 
dorsement on the back of it. It is just the 
same as if the railroad company were the 
receiving teller's window in the local bank. 
Instead of paying in money you pay in 
merchandise, and you get a cashier's check 



130 ABC OF FOEEIGN TEADE 

in the form of a bill of lading to your 
order. If you, or your agent in any port, 
are to draw tMs ^^ money/' that is to say, 
the merchandise, from the railroad company, 
the railroad company will require the return 
of the *^ cashier's check,'' or, in other words, 
the bill of lading which it issued to you, with 
proper endorsement. 

If you ship in carload lots your agent will 
not have to cart or haul the merchandise from 
the railroad to the dock, because the railroad 
delivers carload lots free of charge alongside 
the steamer, so that in such cases any service 
or expense ^n the part of your agent would 
be unnecessary. 

Be sure that you prepay the freight, and 
thereby eliminate many difficulties both for 
yourself and for your agent. As a matter of 
fact, most railroad companies and most steam- 
ship companies now demand prepayment of 
export freight. 

STEAMSHIP BILL OF LADHSTG 

Just as you want a clean railroad bill of 
lading, that is to say, a through bill of lading 
which will show that your shipment has been 



TRANSPORTATION 131 

received in good condition, so, of course, you 
will want a clean bill of lading from the 
steamship company. If your bill of lading is 
not clean, you invite in many cases a claim for 
damages from your foreign customer. If you 
find that the railroad bill of lading is not clean, 
correct the damage or replace the goods before 
shipment. If this can not be done, you 
may indemnify the steamship company and 
thereby get a clean bill of lading, but this must 
be avoided as much as possible, although if 
your customer receives a clean bill of lading 
he is not so likely to make a claim. The point 
is, of course, not to permit the shipment of 
damaged goods if you can prevent it. 

The steamship bill of lading is merely a re- 
ceipt from the steamship company and an 
agreement to carry the goods to their des- 
tination, but the steamship company is not 
responsible, as is the railroad company, for 
damage to the goods. The clauses and condi- 
tions on the steamer bill of lading differ in 
the various companies and do not particularly 
require any special study on your part. 

Always try to ship your goods direct to their 
destination without trans-shipment, because 



132 ABC OF FOREIGN TRADE 

trans-shipment means not only delay, but also 
added cost in handling your merchandise. 

FEEIGHT KATES 

Freight rates are charged by measurements, 
or weight, at the steamer ^s option. In other 
Words, the steamship company decides wheth- 
er it should charge the freight per ton of 
2,000 pounds, or by cubic ton of 40 cubic feet^ 
The steamship company will naturally decide 
on the rate which pays it the best, and for this 
reason you will find that most manufactured 
articles will be booked on the measurement 
basis, as the weight is generally not applied 
when goods weigh more than 55 pounds to the 
cubic foot. It goes, therefore, without saying 
that whenever you ask for freight quotations 
you must give the weights and measurements 
and number of cases of your merchandise, so 
that the steamship company, or any of the 
other agencies which you employ, can give you 
a quotation. Whenever the steamship com- 
pany or forwarder quotes you, you must con- 
firm the booking, as otherwise you may have 
trouble. If a man quotes you to-day on steel 
it does not mean that you have bought it, and 



TEANSPORTATION 133 

the sale is only complete after your order has 
been received and confirmed. The same prin- 
ciple applies to freight quotations. 

LOADING 

If you deal direct with the steamship 
company be sure you ascertain where and 
when the goods are to be delivered. A ship 
is loaded pretty much the same way 
you pack your trunk. If you make a trip 
from New York to Chicago in the winter and 
then intend to proceed from there to Florida, 
you will put your heavy clothing on top. Chi- 
cago being your first stop, the clothes you will 
need there come out first. Then when you get 
to Florida you go to the bottom of your 
trunk. Therefore, as most steamers stop at 
several ports, the merchandise intended for 
the last port is put in first; and the goods 
which are to be discharged at the first port of 
call go on top of the cargo. 

PERMIT 

When you book your freight you get a ship- 
ping permit which corresponds to the 
^^ Shipping Order" issued by the railroad. 



134 :KB G OF FOREIGN TEADE 

The shipping permit, both from the railroad 
and the steamship companies, is issued to you 
to show the railroad, steamship and dock 
officials that you have booked your space 
on the steamer. The shipping permit always 
has certain instructions as to delivery, etc., 
printed on it with which you must comply. 
No explanation of them here is necessary, be- 
cause they are very clear and plain, and all 
you have to do is to fill them out properly and 
carefully. 

DECLARATION" 

Your agent, or the drayman whom 
he employs at the port sends the ship- 
ping permit to the dock together with the 
goods. The receiving clerk on the steamer's 
pier takes the permit and gives the driver a 
dock receipt showing that the goods have been 
received on the dock. As has been stated be- 
fore, it is necessary for you to know when your 
merchandise is required by the steamer, and it 
is for this reason that you should always keep 
a dock receipt, because it shows when 
you delivered the goods. Another docu- 
ment which you require in order to make ship- 



TEANSPORTATION 135 

ment is the export declaration. Nothing more 
need be said in connection with this than with 
any other document required by the govern- 
ment- Answer all questions, tell the truth, 
and be scrupulously careful in all your state- 
ments. Uncle Sam requires this export 
declaration and you, or any one whom you ap- 
point as your agent, must swear to it in the 
office of the collector of the port, or in the cus- 
tom-house. When you have done that the ex- 
port declaration will be set aside and when 
you present it to the steamship company, to- 
gether with a dock receipt, you will get the 
bni of lading. Of course, all this applies on 
shipments which you handle direct with the 
steamship company. Any stenographer or 
office boy can obtain and swear to the export 
declaration in your behalf. 

COPIES OF EECORD 

The bill of lading is the receipt from the 
steamship company drawn to your order, or to 
that of your consignee. It gives title and pos- 
session to the merchandise, as explained be- 
fore, just like a cashier's check. There are 
always one original and several copies issued, 



136 :A! B C 01^ FOREIGN TRADE 

the original being signed by either the steam- 
ship agent or the captain of the vessel. But 
any of the copies when properly endorsed — 
unless marked non-negotiable — ^will obtain de- 
livery of the merchandise to the party present- 
ing it at the post of discharge. The steamship 
company as implied above also issues non- 
negotiable copies, which, of course, are merely 
copies of record and have no value. 

For this reason when your banker handles 
the bills of lading, he requires all of the nego- 
tiable copies. You will note that the bill of 
lading states that such and such a number of 
copies have been signed, but the word 
^* copies'' stands for negotiable bills of lading, 
viz., — those that give title and posses- 
sion to the merchandise if properly en- 
dorsed. The non-negotiable bill of lading 
you use for your files, keeping one for this pur- 
pose ; you send one to your customer through 
the mail; one you send later as a follow-up; 
one goes to the steamship company, and one, 
in some cases, goes to the foreign counsul, as 
explained in the chapter dealing with consular 
invoices. 

You will find instructions later on as to what 



TRANSPORTATION 137 

you should do with the negotiable copies of 
bills of lading. 

CONSULAR INVOICES 

A number of countries require consular in- 
voices or other documents. If you are care- 
ful with your own invoices be thrice careful in 
your consular invoices, because every mistake 
means a heavy fine to your customer. 

There are various forms of consular in- 
voices. Some of them are attestation, or vises 
of the manufacturer's invoice; some of them 
of the bill of lading by the consul. Some of 
them are certificates of origin, i. e., — certifi- 
cates showing where the merchandise origi- 
nates. These certificates are required for all 
countries which have a *^ favored nation'' 
clause in their customs laws, so that goods from 
any nations belonging to the class of ^^ favored 
nations" may enjoy an especially low duty. 
Therefore, wherever such a clause exists af- 
fecting the United States, such a certificate 
should be procured. 

Consular invoices are copies of the shipper's 
invoice, in the language of the country to 
which he is shipping. They must be sworn to 



138 "K B C OF FOEEIGN TEADE 

after liaving been filled out by the manufac- 
turer. These consular invoices are generally 
supplied by the consuls themselves, who make 
a charge in proportion to the value of the 
merchandise covered by the invoice. These 
invoices are needed by the customs authori- 
ties of your client's country and in some cases 
must be presented to the steamship company 
before the steamer will accept your goods, but 
in such case the steamship company will al- 
ways so advise you. 

The most important thing to remember in 
connection with these consular invoices is that 
they are required on account of the customs 
regulations of the country to which you 
are shipping. Therefore, be accurate and call 
a spade a spade. Don't call it a shovel, as it 
may cost a lot more in duty to your foreign 
client. 

Tariff duties are constantly changing in 
many countries of the world, and, therefore, 
no printed schedule is ever really up to date. 



CHAPTER X 

The Freight Forwardeb 

The freight forwarder is an agent who at- 
tends to foreign shipments, books the freight 
and handles everything in connection with the 
ocean traffic. 

While a freight forwarder can save you 
much time and trouble by handling this phase 
of your business, you must be very careful in 
choosing such an agent. 

Apparently you are relieved of a lot of 
trouble at the time of making shipment, but 
much serious trouble as well as financial loss 
may fall upon you later, if you have not 
chosen the right forwarding agent. When 
making your selection, therefore, be exceed- 
ingly careful with whom you deal. There are, 
of course, a number of honorable, legitimate, 
trustworthy firms, but the only forwarders 
you can afford to consider are those who will 
absolutely guarantee to you in writing that 
they do not speculate in freight, and will 

139 



140 ABC OF FOEEIGN TRADE 

charge you nothing but a definite fee of say 
from fifty cents to two dollars per ton on the 
freight shipped for your account. The mo- 
ment a forwarder hesitates to give you such a 
guarantee, it is best for you to have nothing 
to do with him. The freight broker who spec- 
ulates in freight generallj^ makes immense 
profits at the expense of his customers, and 
thereby increases tremendously the landed 
cost of your goods. Many freight forwarders 
have done incalculable harm, have spoiled 
many good accounts, and have prevented many 
repeat orders through certain abuses, espe- 
cially the imposition of extortionate charges 
against the shipments they handle. In the be- 
ginning, when dealing with a forwarder, watch 
him, and watch him constantly, and do not deal 
with just one, but try a number of them. Then, 
if one makes good, proves honest and reliable, 
give him the bulk of your business. But at 
the start, get quotations from three or four 
before you entrust a shipment to any one, and 
try in every way possible to protect yourself. 
After you have entrusted a shipment to a 
freight forwarder, have your customer report 
how the shipment reached him and what the 
charges were. 



THi] Jb^KEIGHT FORWAEDER 141 

THE HONEST FORWAKDER 

A man or a firm has to be either honest or 
dishonest. There is no middle ground. An hon- 
est freight forwarder is often indispensable 
to you, especially in the initial stages of 
your experience in making shipments to for- 
eign countries. And just for the reason that 
he is in a position to do so much good or 
so much harm — according to the manner in 
which he conducts his business — ^his relation 
to the export business in general and to yours 
in particular will prove either a blessing or 
a curse. 

There are, fortunately^ many competent, 
honest, high-class concerns in this country 
who do business on the right basis and who 
are a credit to the profession. If you make 
careful inquiry and select one of these firms 
to handle your freight forwarding you will 
find that he will help make smooth your deal- 
ings with your foreign customer by attending 
carefully to the many details which are neces- 
sary to insure minimum expense, prompt ship- 
ment and prompt clearance at port of destina- 
tion. The author has no word of criticism for 
the honest freight forwarder, but he does feel 



142 'M B G 0¥ FOEEIGN TRADE 

it important not only to warn the inexperi- 
enced against a very considerable number of 
concerns who are tricky and nnscrupulous, 
but also to explain in detail some of the dis- 
honest practises to which they resort, and how 
you may protect yourself against them. 

THE DISHONEST FOKWARDER 

Do not Judge a freight forwarder by his size, 
or his reputed financial responsibility or the 
number of his employees, for some of the larg- 
est companies are the worst offenders and 
worst enemies to foreign trade in this country 
to-day. The ideal forwarder, if you have to 
employ one, is the concern that can and will 
give your shipments actual and individual in- 
spection and attention; also one which is not 
big enough to speculate in ocean freights, or if 
big enough is too honest to do so. 

Be very careful about this in the beginning, 
and get positive assurance in writing. The 
dishonest forwarder has done much to un- 
dermine American trade in foreign markets. 
No matter how much money and thought you 
may have spent in building up your foreign 



THE FREIGHT PORWAEDER 143 

sales, no matter how salable your product may 
be, if your customer is not satisfied with, the 
way in which the entire order has been 
handled, especially in the shipping of the 
goods, or if the landed cost of the merchandise 
is prohibitive, your business will often be dam- 
aged beyond recovery. 

You naturally would not want some second- 
ary clerk to attend to your shipments, one who 
has no more knowledge of foreign shipments 
than your own domestic shipping clerk has, ex- 
cept, perhaps, that he has learned a certain 
amount of routine in a forwarder's office. 
This, however, is just what happens in many 
large freight forwarding concerns. The actual 
shipment is turned over to some subordinate, 
and the very purpose you had in employing 
the forwarder is defeated at the outset. You 
employ and pay the forwarding company be- 
cause you wish to have an expert organiza- 
tion handle the shipment for you, but if that 
organization, as far as your shipment is con- 
cerned, consists merely of a shipping clerk, 
you naturally will not get anything but trouble 
from such handling of your merchandise. 
Therefore, be sure that the organization is not 



144 A B C OF FOREIGN TRADE 

so big tliat it can not give you individual atten- 
tion, but on the contrary make sure that capa- 
ble, experienced, responsible people are de- 
tailed to handle your shipments. The freight 
forwarder will naturally solicit your business 
and in most cases will promise you the prompt- 
est service, the lowest rates, and anything else 
that might induce you to give him your ac- 
count, but unfortunately those promises are 
not always kept, and if he does not live up to 
his agreements he may hurt you and your rep- 
utation very disastrously. 

WRITTEN STATEMENT 

Once more the author cautions you to de- 
mand an absolute statement in writing, in such 
form that it is legal and binding, that 
the freight forwarder does not speculate 
in ocean freights. The moment he hesi- 
tates to give you this assurance keep 
away from him. He may try to explain to 
you why you should deal with him just the 
same, but don't listen to him. If certain 
freight forwarders read this book this state- 
ment will probably arouse their anger; but. 



THE FEEIGHT FORWARDER 145 

nevertheless, if you follow this advice implic- 
itly you will never regret it. The author him- 
self has had some costly and unfortunate 
experiences with freight forwarding con- 
cerns in this country, who have damaged 
his business with a number of his best 
clients in a manner that can never be re- 
paired, by speculating in freights and by care- 
less handling of shipments through subordi- 
nates. The value of this advice, if you will 
heed it, will be worth thousands and thousands 
of dollars to you. 

LOWEST COST POSSIBLE 

Now to explain this. You realize that it is 
necessary, in order successfully to establish 
your merchandise in foreign countries, to land 
it at the lowest possible cost, which means in 
addition to the actual cost of the goods — ^the 
lowest possible freight. You can do this only 
if the forwarder gets you the lowest current 
rate. 

By way of example, let us compare the 
steamship with a theater. The ticket specu- 
lator or scalper buys a number of seats and 



146 ABC OF FOREIGN TEADE 

sells the tickets to you at any price lie pleases. 
If you wish to see the performance, he may 
charge you five dollars for a two-dollar seat. 
When he sells you the ticket he will tell you 
that this is the lowest price at which you can 
'buy a ticket in that theater. When he makes 
that statement he may be telling the truth as 
far as he is concerned, because it may be 
'actually the lowest price at which he will sell 
a ticket. 

The freight forwarder who speculates, spec- 
ulates in the same way. He becomes a scalper 
in freights, nothing less. He buys, that is to 
say, he books so many cubic feet of space in a 
ship, and legitimate shippers are obliged to 
buy the space from him. Freight forwarders 
who speculate often control the entire ship- 
ping space of a vessel. The vessel being thus 
booked to its capacity, if you wish to get in 
with your cargo you have to go to the freight 
forwarder and buy the space from him at a 
premium. 

PLAYING SAFE 

Just as the theater ticket scalper always ex- 
acts the most exorbitant profits, so does the 



THE FREIGHT FORWARDER 147 

speculating freight forwarder, in most cases, 
ask almost impossible rates for his space. He 
will do so all the more, and in a manner dif- 
ficult to detect until too late, if you will leave 
the matter entirely to him, with authority to 
ship the goods and collect the freight from 
your customer, or from the bank. He books 
space, say at twenty dollars per ton; he sells 
it to you, say at forty dollars per ton or even 
more, and, of course, he tells you that this is 
the lowest freight rate at which you can book 
•on that vessel, thereby increasing the freight 
charges and landed cost of your merchandise 
tit destination one hundred per cent, or more 
above the steamer rates. In many cases 
the freight forwarder, in order to play safe, 
Ibooks the space in the name of a third party 
and then tells you with even more assurance, 
as on the face of it he is telling the truth, that 
this is the lowest price he can get. In either 
case the customer is being robbed, and while it 
is not money directly out of your pocket, as 
your customer pays the freight, you are the one 
who will suffer most from the consequences of 
such actions. The freight forwarder, if he has 
made an illegitimate profit on your shipment, 



148 :^ B C OP FOEEIGN TEADE 

is indifferent thereafter whether he loses your 
account or not. He will continue to handle 
your business until you detect him. As his ille- 
gitimate profit may be from twenty to fifty 
times as high as he ought to have charged, if 
you have given him twenty shipments, he has 
appropriated profits equivalent to what he 
would have made legitimately on perhaps a 
thousand shipments. Therefore he has made 
his profit on your business in advance and does, 
not care if he should eventually lose you. 

THE BOOKING FEE 

The only way in which you should ever deal 
*with a forwarder is to allow him a certain fee 
or margin per ton over and above the actual 
steamship rates. This fee may amount to any- 
where from fifty cents per ton to the maximum 
charge of two dollars per ton. In other 
words, if the steamship charges forty dollars 
per ton, he is to submit to you the original 
steamship invoice and charge not to exceed 
two dollars per ton over and above that 
amount. In no case is he to bill his own 
freight rates, or anybody else's but the 



THE FEEIGHT FORWARDER 149 

steamship's rate plus the booking fee which 
has been agreed upon between him and 
you. In other words, just like some ticket of- 
fices in hotels charge a fee of fifty cents a ticket 
for theater tickets from which they do not 
vary, no matter what the box office price of the 
ticket may be, so the freight forwarder should 
not in any circumstances charge more than the 
actual steamship company's charges plus his 
booldng fee. Then you and your client are 
protected. 

LEGITIMATE FUNCTION 

Some forwarders will offer to attend to 
everything in connection with your foreign 
shipments, from A to Z. They will even offer 
to do your packing for you, but you should 
never allow a forwarder or warehouse man to 
pack your merchandise if you can help it. The 
packing is such an important item in connec- 
tion with foreign shipments that it will not 
pay you to let anybody handle it except your 
own men, working, in fact, under your own su- 
pervision. The forwarder is not interested in 
your merchandise, nor how it is shipped nor 
how it arrives at its destination. He does not 



150 :A; B C OI' FOREIGN TRADE 

sell mercliandise, nor does lie buy it. He does 
not care whether or not he can economize on 
freight by careful packing. Therefore, do 
not let the forwarder perform anything except 
his legitimate function, namely, the shipment 
of merchandise, and then only under the con- 
ditions above set f orth, 

INSURANCE FORWARDEES 

The same applies to insurance which is 
treated in a succeeding chapter. Don't let a 
forwarder attend to your insurance business. 
The insurance companies and insurance brok- 
ers are the people to handle your insurance 
properly. Marine insurance in itself is such a 
science, and such a complicated branch of the 
insurance business, that it should not be en- 
trusted to any one who is not a specialist in 
that line. A freight forwarder is not an 
insurance man. Not only that but generally 
the writing of an insurance policy in a 
freight forwarder's office consists merely 
in the filling out of the printed policy 
blank for the sake of cashing in the commis- 
sion involved. In most forwarding offices the 
insurance is handled by a minor clerk in the 



THE FREIGHT FORWARDER 151 

same superficial way, without any more 
thought than he gives to the copying of letters. 
Therefore, remember this, and go to an insur- 
ance company or to a competent insurance 
broker for your insurance and do not confide 
it to any one who handles insurance merely 
as a side line for the purpose of picking up a 
few extra commissions. Most forwarders 
handle insurance on an ^^open policy. '' This 
ties them — and therefore you — down to one 
company only and prevents you from getting 
the benefit of premium competition. 

When the goods leave the factory for ship- 
ment at an Atlantic or Pacific port, railroad 
and steamship transportation enter into the 
question. The freight forwarder who does 
business in a legitimate, straightforward, hon- 
est manner can be of service to you. Such a 
forwarder will not hesitate to guarantee to you 
that he does not speculate in freight rates, and 
he will give you the advantage of all rebates, 
discounts, lower rates or combined rates, which 
he is able to obtain, and confine himself to his 
true function. 



CHAPTER XI 

FUKTHEE ON FOKWARDERS 

[You know from your domestic business that 
it is cheaper to ship in carload lots than in 
smaller shipments. The freight forwarder, 
therefore, combines a number of smaller ship- 
ments for the purpose of getting together a 
carload and he thereby obtains a carload rate. 
This completed carload is called a consolidated 
carload. You can allow him to handle ship- 
ments for you for the purpose of consolidating 
a carload, provided you or your customer 
thereby are charged railroad freight at carload 
rates only. The freight forwarder takes an en- 
tire car and pays the freight on it and then 
gets together enough merchandise to fill it, and 
if he does not speculate on this and charge you 
more than the tariff carload rate, nor speculate 
on ocean freights, you have a decided advan- 
tage in joining with him in a consolidated car- 
load lot. If he can not get together enough 
merchandise from his own clients to make up 
the carload, he will go to other freight for- 

152 



FURTHER ON FORWARDERS 153 

warders or manufacturers and join with them 
in combining the merchandise to make up a 
carload, getting a bill of lading from the rail- 
road company or steamship company and is- 
suing his own bill of lading for the shipment. 
However, unless he can assure you that he can 
make up a carload lot of merchandise, never 
accept Ms own hill of lading. This is another 
rule you must absolutely adhere to in doing 
business. 

FORWAEDER^S BILL OF LADING 

The forwarder's bill of lading is not binding 
on the railroad, nor is it binding on the steam- 
ship company. If you are not aw^are of this 
and if you do not watch carefully, you might 
very naturally think that the bill of lading of 
the forwarder, showing that he has shipped 
five cases for you to Hongkong, China, for ex- 
ample, is a regular bill of lading, because it 
gives the name of the steamer and looks like a 
bill of lading in every way. But do not accept 
it, and have it understood in advance that you 
will not be expected to accept it. The forward- 
er's bill of lading is nothing but a receipt for 
the merchandise, showing that he has shipped 



154 ABC OF FOEEIGN TEADE 

the goods to his own foreign agent at the desti- 
nation. It is not a guarantee that the goods 
have been received by the steamer j, nor a re- 
ceipt from the steamer that the goods are on 
board. The forwarder's agent in the foreign 
country receives the combined shipments and 
distributes them for his principal (the for- 
warder), but in such case you would not be 
dealing directly with the railroad or steamship 
company and it does not pay you to handle 
your business in that manner. Many bankers 
absolutely refuse to accept a forwarder's bill 
of lading. This should give you a very good 
idea of the commercial value of such a docu- 
ment. 

BATE CARD 

If you deal with the forwarder on the 
basis of a fee over and above the amount of the 
railroad and steamship rates, which is the only 
way you should deal with him, be sure that he 
gives you the benefit of all reductions which he 
may receive on ocean or consolidated carload 
freight rates. Then you are protected, and 
you will also have to pay no attention to the 
forwarder's rate cards. You are in no danger 



FURTHER ON FORWARDERS 155 

of losing anything by that, for as a matter of 
fact, the rate cards do not mean anything. 
A rate card is merely a promise of rates, 
which the forwarder hopes, or thinks, or ex- 
pects, he will be in a position to charge, but 
they are not binding in any way. For this 
reason when you receive such rate cards, as 
an inducement to place the business, remem- 
ber that they are not fixed but subject to 
change without notice. 

CONSOLroATED CARLOADS 

Another very important thing when entrust- 
ing your merchandise to a forwarder for con- 
solidated carload lots is to know that he has 
made arrangements for sufficient merchan- 
dise to make up a carload lot. If you do not 
have this assurance, your goods may lie around 
in a warehouse for weeks before he gets to- 
gether enough merchandise to constitute a car- 
load, and by this delay you may lose many 
shipping opportunities and much business. It 
seems rather hard on the forwarder to make 
all these statements. Yet they are all true, and 
if you do not heed the advice, you may suffer 
irreparable damage. 



156 A.B G OF FOEEIGN TRADE 

PADDING 

The next thing you must guard against when 
having a forwarder handle your shipments is 
the ^ ^padding'' of the invoice. This is a spe- 
cialty with certain forwarders, and some of the 
largest are the greatest offenders. When you 
ship a case of goods from New York to China, 
you have it carted to the railroad station. 
If it is not shipped in carload lots, it has to be 
transferred by truck from the station to the 
steamer and then loaded on the steamer. A 
certain amount of work is connected with each 
of these operations. This is "meaV^ for a 
tricky freight forwarder, who is hungry for 
it. He just loves these operations, for they 
give him a seemingly legitimate excuse for 
making a charge; and you had better watch 
these charges. 

Eemember that every dollar of expense 
added to the cost of your merchandise in- 
creases the cost and selling price of the 
merchandise in the land of its destination, and 
thereby reduces its selling possibilities, as well 
as your prospects for repeat orders. Suppose 
the forwarder pays 50 cents or $1.00 for cart- 



FURTHER ON FORWARDERS 157 

ing. He may charge you, or rather your cus- 
tomer, as much as $10.00. He hires a truck 
for $25.00 to carry fifty small shipments, and 
he may charge against each small shipment in- 
dividually $10 or $20, practically the cost of 
the truck for all of the combined shipments, 
feeling safe to do so because your helpless 
client overseas does not know that his package 
went along with a load of other stuff, and as- 
sumes that the forwarder was obliged to hire 
a truck to carry his merchandise alone to the 
dock. It is exactly the same principle that you 
will find straight through the dishonest for- 
warder's transactions. He will hire space for 
transportation by truck, by drayman's cart, 
by rail, by barge, by steamer, and instead of 
dividing the cost among the number of ship- 
ments carried, he charges each individual ship- 
per a stiff price, just as he will charge indi- 
vidual local rates on his combined consolidated 
carloads unless otherwise agreed. You can 
easily imagine how this accumulates, netting 
such a forwarder an illegitimate profit of any- 
where from 200% to 1,500% on the transac- 
tion. Always remember that and be careful 
with whom you deal. 



158 A B C OF FOREIGN TRADE 

FAKE CHARGES 

When shipping goods from Decatur, Illi- 
nois, to New York, the rate is exactly the same 
as from Chicago to New York, but an unscrup- 
ulous forwarder will make a charge for trans- 
portation from Decatur to Chicago, or will in- 
clude a charge for a four-horse team from that 
town to the Illinois shipping center. Keep 
your eyes open for such illegitimate charges. 
Have them eliminated immediately and cut 
such a forwarder off your list forever. 

When the goods arrive alongside the 
steamer, on the dock, the tricky kind of for- 
warder sees an opportunity to slip in a charge 
which would lead the customer to believe the 
goods were dumped on the dock and then had to 
be sent out by lighter or barge to the steamer. 
Another item to which you want to pay partic- 
ular attention is the forwarder's charge for 
what he calls ^^ documents.'' He will charge, 
for example, for the issuance of a bill of lading, 
which does not cost him anything, and for 
which he has no right to charge, and which he 
is paid for in the booking fee, because the 
booking fee includes payment for his trouble 



FUETHBR ON FOEWARDERS 159 

and work in connection witli the shipment. He 
will also charge for a permit, which to a for- 
eign client may mean anything from a per- 
mit from the United States Government to 
ship the goods, to a permit from the custom- 
house authorities to allow the goods to leave 
the country. This is another illegitimate 
charge, which should not be permitted to be 
included on any invoice. He will also have a 
fee charged for ^^ handling," which may vary 
anywhere from $1.00 to $25.00. This item 
also has no place on any legitimate forwarder's 
bill, and should never be allowed to be in- 
cluded, unless it represents an actual item for 
which a voucher can be produced. An addi- 
tional and illegitimate charge for obtaining a 
War Trade Board license is also sometimes 
made. It is really surprising that the gov- 
ernment has not taken steps to stop these dis- 
honest practices, and proceeded long ago 
against those guilty of these frauds. Another 
charge which may crop up in a forwarder's 
bill is one for obtaining ^^ export declara- 
tion." As you have seen in the chapter 
dealing with this declaration, it can be ob- 



160 ABC OF FOEEIGN TRADE 

tained from any custom-liouse or if you 
wish to have the forwarding company arrange 
with its branches or agents at the port of 
shipment to make this declaration for you, you 
can deliver to them a statement in the follow- 
ing manner, which, however, must be signed 
by a responsible officer of your company, at- 
tested by the seal of your corporation and cer- 
tified to by a notary public : 

Date 

Collector of Customs 
(Name of Port from which 
shipment is being made) 

Dear Sir : 

This is to advise you that (insert name of the 
forwarding agent) is authorized to act as our 
agent in the matter of signing and swearing to 
Shipper's Export Declarations, covering goods 
shipped or exported by the undersigned; that 
he is fully informed as to the actual value of 
the goods, and capable of knowing that they 
are properly described in said declaration, as 
required by the Customs Regulations govern- 
ing the collection of statistics. 



FURTHER ON FORWARDERS 161 

TMs authorization to remain in full force 
and effect until duly revoked and until notice 
of such revocation is duly given to and received 
by you. 

Yours very truly, 
(Name of your Company) 
By (Name of officer of your company) 
(Seal of your (Title.) 

company.) 

When the agent has this authority, he can 
get the export declaration. As already men- 
tioned, it is not necessary that the forwarding 
agent go in person to make the declaration, as 
any stenographer or office boy can get it from 
the custom-house, but whoever attends to the 
matter, no charge should be made for it, and 
you should not honor any invoice having such 
a charge included. 

Fi:NrANCi]srG by forwaeders 

Another thing you should be warned against 
is the financing of your shipments by the dis- 
honest forwarder. When you allow him to do 
this, you are generally in his clutches, because 



162 .^ B OF FOEEIGN TEADE 

the mercliaiidise becomes Ms property and lie 
may make such charges as he sees fit and 
fleece your customer to the utmost of his abil- 
ity. You lose all control over the situation. 
As a matter of fact, the forwarder does not 
finance your shipment. He merely goes to a 
bank which advances him the money, but it 
puts him in a position to stick on to the invoice 
any charge he pleases and collect from the 
bank where the letter of credit is opened by 
your foreign customer. In that case, the for- 
warder will ask you to give him a blank draft 
because at the time he pays your invoice, he 
does not know what the shipping and other 
charges will be, which is true, and he will re- 
quest you to hand him a signed blank draft. 
Unless you are satisfied as to his integrity, do 
not give him such a blank draft, as he is liable 
to fill out an amount that is not justified. 
This will consist of what he has paid, 
plus any charges for warehousing, carting, 
and any number of other padded items 
he may wish to include plus a high rate of in- 
terest on the amount of the invoice he has 
financed for you. You can imagine how your 
customer feels when he has to pay a draft like 



FUETHER ON FORWARDERS 163 

that or when the bank with whom the letter of 
credit is opened has to pay such a draft to your 
accoimt. The forwarder will have killed all 
possibility of any further business between 
yourself and that customer. 

ADVANTAGES OF FORWAEDERS 

If the forwarder is honest, as happily many 
of them are, and charges you only a definite 
fee above the actual railroad and steamship 
freight rates paid — ^if he does not pad his in- 
voices, and if he will give you prompt and 
good service, then there is a genuine advantage 
in shipping through him, especially if you ship 
chiefly in less than carload lots and can benefit 
by his consolidation of shipments; but for 
larger shipments, it is always advisable 
to deal direct with the railroad company and 
the steamer. Just as you get quotations from 
various printers when you wish to place a large 
order, in like manner you never should rely 
upon the quotations of one forwarder, nor 
upon his ability to give you service, until you 
have established a definite connection, based 
on actual experience. When you have a ship- 
ment to make, it is always advisable to write 



164 ABC OF FOEEIGK TEADE 

letters to several forwarders, advising them of 
your intended shipment. You will then have 
the advantages of rates from various sources, 
and of course you will ship through the party 
quoting the lowest rates. Another reason for 
this is that one forwarder may be better posted 
than his neighbor, and can give you the names 
of boats which sail earlier, or follow a more 
direct route and, naturally, it is most advisable 
that you know all this and take advantage of 
every opportunity. If you wish to ship from 
the Pacific Coast, a forwarder on the Pacific 
Coast may be better posted than the New York 
forwarder's Pacific Coast agent. In some 
cases from one to six months are saved by get- 
ting a number of forwarders busy to ascertain 
the earliest possible sailing date, thereby 
greatly serving both your client's interests and 
your own. For example if you have goods to 
ship to China, write to several forwarders, 
giving them full information as to what you 
have to ship, in a letter as follows : 

Gentlemen : 

We will have six cases of dry goods ready 
for shipment from this city eight weeks from 
to-day, packed for export. These cases meas- 



FUETHER ON FORWAEDERS 165 

ure as follows: (Give detailed measure- 
ment of each case). And the gross and net 
weights are as follows: (Give gross and net 
weights of each case). 

Please advise us of the earliest possible 
steamer on which you can book these goods, 
if we turn the shipment over to you for han- 
dling. Also state from what port, and quote the 
lowest railroad and steamship rates, confirm- 
ing to us that the rates so quoted are actual 
railroad and steamship rates, quoted by the 
railroad and steamship companies. Please ad- 
vise also, what your fee would be, over and 
above the actual railroad and steamship rates, 
for handling this shipment. 

Trusting that we may be able to confide these 
goods to you for transportation to final desti- 
nation, we beg to remain 

If you send such a letter to several for- 
warders, your replies will show you the earliest 
sailing dates, and the lowest cost of shipment, 
which should guide you in the selection of your 
forwarder. 



CHAPTER XII 

The Dkawback 

Very few manufacturers in this country 
are acquainted with the important law 
called the ^^ Drawback/' This law allows a 
manufacturer to get a refund from the gov- 
ernment of all duties paid on the entry of such 
foreign material into this country, provided 
such material has been used in the manufac- 
ture of articles which subsequently are ex- 
ported to other countries. The drawback is 
collectable whether the exported article is 
manufactured wholly or only partly of such 
imported material. Whatever import duty 
has been paid on the actual amount of such 
foreign material so used will be refunded 
upon application by the United States Gov- 
ernment, less one per cent., which the govern- 
ment retains. To obtain this refund, it is not 
even necessary that the goods shall have been 
imported in the name of the manufacturer. 
It is strange that so few know the facts con- 

166 



THE DRAWBACK 167 

cerning this law, as it means a saving of thou- 
sands of dollars to producers of merchandise 
manufactured out of imported material of any 
kind. And this of course reduces the price of 
the merchandise. Drawback agencies are 
maintained in this country which occupy 
themselves in collecting such refunds from the 
United States Treasury. These agents make 
claim on the manufacturer's behalf, which is 
investigated by inspectors of the United States 
Treasury, and if found to be just, the above 
mentioned refund is made by the government. 
Therefore, if you use material of this kind in 
your export product, be sure to take advan- 
tage of this law. The following is a copy of 
the law, which is known as 

^* Paragraph O, Section 4, Tariff Act of Octo- 
ber 3, 1913: 

^^O. That upon the exportation of articles 
manufactured or produced in the United States 
by the use of imported merchandise or mate- 
rials upon which customs duties have been 
paid, the full amount of such duties paid upon 
the quantity of materials used in the manufac- 
ture or production of the exported product 



168 :A: B C OF FOEEIGN TRADE 

sliall be refunded as drawback, less one per 
centum of such duties: Provided, that where 
a principal product and a by-product result 
from the manipulation of imported material 
and only the by-product is exported, the pro- 
portion of the drawback distributed to such 
by-product shall not exceed the duty assess- 
able under this Act on a similar by-product of 
foreign origin if imported into the United 
States. Where no duty is assessable upon the 
importation of a corresponding by-product, no 
drawback shall be payable on such by-product 
produced from the imported material ; if, how- 
ever, the principal product is exported, then on 
the exportation thereof there shall be refunded 
as drawback the whole of the duty paid on the 
imported material used in the production of 
both the principal and the by-product, less one 
per cent, as hereinbefore provided; Provided 
further, that when the articles exported are 
manufactured in part from domestic materials, 
the imported materials or the parts of the 
articles manufactured from such materials 
shall so appear in the completed articles that 
the quantity or measure thereof may be ascer- 
tained ; And provided further, that the draw- 



THE DRAWBACK 169- 

back on any article allowed under existing law 
shall be continued at the rate herein provided. 
That the imported materials used in the manu- 
facture or production of articles entitled to 
drawback of customs duties when exported 
shall, in all cases where drawback of duties 
paid on such material is claimed, be identified, 
the quantity of such materials used and the 
amount of duties paid thereon shall be ascer- 
tained, the facts of the manufacture or pro- 
duction of such articles in the United States 
and their exportation therefrom shall be de- 
termined, and the drawback due thereon shall 
be determined, and the drawback due thereon 
shall be paid to the manufacturer, producer, 
or exporter, to the agent of either or to the 
person to whom such manufacturer, producer, 
exporter or agent shall in writing order such 
drawback paid, under such regulations as the 
Secretary of the Treasury shall prescribe. 

^^That on the exportation of flavoring ex- 
tracts, medicinal or toilet preparations, (in- 
cluding perfumery) hereafter manufactured or 
produced in the United States in part from do- 
mestic alcohol on which an internal-revenue 
tax has been paid there shall be allowed a draw- 



170 A B C OF FOEEIGN TRADE 

back equal in amount to the tax found to have 
been paid on the alcohol so used: Provided, 
that no other alcohol than domestic-tax-paid 
alcohol shall have been used in the manufac- 
ture or production of such preparations. Such 
drawback shall be determined and paid under 
such rules and regulations, and upon the filing 
of such notices, bonds, bills of lading, and other 
evidence of payment of tax and exportation, as 
the Secretary of the Treasury shall prescribe. 
^^That the provisions of this section shall 
apply to materials used in the construction and 
equipment of vessels built for foreign account 
and ownership, or for the government of any 
foreign country, notwithstanding that such 
vessels may not, within the strict meaning of 
the term, be articles exported.'' 



CHAPTER XIII 

Selling on the C. I. P. Basis 

Besides selling on a P. O. B. car or steamer 
basis or a P. A. S. steamer basis, foreign busi- 
ness can be bandied on a C. I. P. basis. 
As already explained, C stands for cost; I for 
insurance and P for freight. In other words, 
when you sell or quote C. I. P., it means that 
your quotation includes the price of the 
merchandise; the cost of insuring the mer- 
chandise from the time it leaves the factory 
until it reaches your foreign customer ; and the 
cost of transportation, both by railroad and 
steamer. It means the price of the merchan- 
dise on board the steamer at port of des- 
tination. Bear in mind, however, that a 
C. I. P. price does not include the delivery of 
the merchandise to the purchaser's store or 
warehouse, because for one thing, this quota- 
tion does not include the duty. When selling 
upon a C. I. P. basis, your obligation ends the 
moment the steamer reaches the port of desti- 

171 



172 ABC OF FOEEIGN TEADE 

nation, or wlien your goods reach, the dock of 
the port to which you are shipping; that is, 
if there is no extra charge for delivery from 
the steamer to the dock. 

But if the steamer discharges its cargo by 
lighters or barges which are towed into the 
harbor, and then unloaded on to the dock, all 
charges for such service must be borne by your 
customer. 

However, all incidental charges, such as 
drayage, boxing (unless it is specifically stated 
that this should be excluded) , handling charges 
and all other items necessary to the actual des- 
patch of the merchandise and its transporta- 
tion to the port of destination must be defrayed 
by you, as they are included in your C. I. F. 
quotation. 

NOT FOR BEGINNERS 

It is not advisable in the beginning of your 
export experience, unless you are thoroughly 
acquainted with freight and insurance rates, to 
quote C. I. F., or to attempt to specify the items 
necessary for a C I. F. quotation, because 
there is always a certain amount of risk in- 
volved in doing so. The method of arriving 



SELLING ON C. L F. BASIS 173 

at the figures which you should quote is simple 
enough. You take the cost of your merchan- 
dise and add the profit, to which you are en- 
titled, or take the list price of the goods ordered 
and deduct the discount to which your custo- 
mer is entitled. This gives you the net invoice 
value of the merchandise which you are selling 
and represents the ^^C in C. I. F. 

Then you ascertain the weight and measure- 
ment of your cargo and ask the steamship 
company or several forwarders for rates, as 
explained in a previous chapter. As you have 
learned, your cargo will probably go by meas- 
urement, though the ship has the option to 
charge by w^eight if it prefers. Take the meas- 
urement or weight of your cargo, as the case 
may be, and calculate how many tons it repre- 
sents. Then multiply your tons by the rate 
quoted. But in a C. I. F. quotation, guesswork 
is almost unavoidable. In the first place, you 
may not know exactly what the measurement 
or weight of your cargo is going to be, and 
you will have to take a chance either of quoting 
too high, and thereby defeating your chance of 
making the sale, or of quoting too low and 
thereby sacrificing your profit. You may also 



174 :a: B C OF FOREIGN TEADE 

figure the cargo on a weight basis and the ship 
may decide to take it ^^ measurement/^ and 
again, you may figure measurement and the 
ship may decide to take it on a weight basis. 
lAf ter a certain amount of experience, you will 
pretty nearly always know what the ship will 
be likely to do, so that you can arrive at a safe 
and accurate basis for quoting C. I. F. prices. 
The hazardous element in the transaction is 
the freight rate, which may have changed be- 
tween the time you quote the price and the 
time you receive the order. Consequently, 
when you get the order, if the freight rate has 
been reduced, you will be earning an extra 
profit, to which you will be legitimately enti- 
tled because if your customer has accepted 
your C. I. F. quotation, it is immaterial to him 
how much you pay for the freight. On the 
other hand, if your customer accepts your 
C I. F. offer and the freight rate meanwhile 
has increased, you will have to stand the 
loss, just as you would have been entitled to 
the profit. 

THE ESTSURANCE ELEMENT 

The next item is the insurance. This too, 
you can ascertain by asking insurance brokers 
or insurance companies to quote their lowest 



SELLING ON a I. F. BASIS 175 

rate. However, no company can quote an in- 
surance rate unless they know the name of the 
vessel on which you propose to ship, because 
insurance is a risk which is underwritten, and 
there is of course a different element of insur- 
able risk applicable to each particular vessel. 
The more seaworthy a ship, the cheaper will 
be your insurance rate, and in like manner, the 
greater the hazard of loss, the higher will be 
your premium. In most cases, when you offer 
your merchandise you can not determine be- 
forehand the name of the vessel^ as you do not 
know when you will ship, nor how you will 
ship. The insurance rate, therefore, must be 
calculated at an average rate, and if that is the 
case, you run the same risk of change that you 
run in quoting freight rates. You may finally 
get a lower rate than you figured and thereby 
make a profit, or you may have to pay a higher 
rate and thereby suffer a loss. From all this, 
you can see that in these days of fluctuating 
freight and insurance rates, it is fiot the wisest 
thing for you to quote C. I. F. 

CARGO LOTS 

The safest way to quote C. I. F. is when sell- 
ing a whole shipload of merchandise. If you 
are a manufacturer, this is very unlikely ; but a 



176 ABC OF FOREIGN TRADE 

concern handling bulk or staple goods such as 
lumber, for example, often sells for export 
in full shipload or cargo lots. Suppose 
you are quoting on a million feet of pine 
for shipment to Australia. This would 
fill a small schooner. You would, therefore, 
figure first the cost of the lumber. Then 
you would obtain an option on a schooner of 
that carrying capacity which would be ready to 
load at the port from which you wish to make 
shipment, at the time you expect to make 
such shipment. If you could get such an option, 
for say from three to five days, to cover you 
until you could get a return cable from your 
customer, then you would have a fixed freight 
rate at — let us say for example — forty dol- 
lars per thousand feet from the Pacific 
Coast to Melbourne, Australia. If your char- 
ter — ^that is to say, the contract— for the hire 
of the ship, contains a clause by which the ship 
does its own loading, you do not have to figure 
that in, and the only extra cost for loading that 
you will have to figure on is the transportation 
of your lumber to the dock at which the vessel 
will load. Then, having an option on a definite 
schooner, the name of which you can give to the 

f 
/ 



SELLING ON C. I. F. BASIS 177 

insurance company, you can obtain a rate good 
for five days, and with this in hand, you can 
then figure exactly your cost, insurance and 
freight, and cable your C. I. F. quotation, good 
for five days, safe from any risk of fluctuation. 

QUOTE BY CABLE 

It goes without saying that in times of un- 
certainty and changing freight and insurance 
rates, it is quite impractical to quote C. I, P. 
by mail. It takes so long before a reply can be 
received that by the time the order is re- 
ceived the quotation would undoubtedly be 
obsolete. Therefore, a C. I. F, quotation should 
only be given by cable. If you quote C. I. F. by 
mail, you will have to quote so high, in 
order to be on the safe side that you will prob- 
ably not be able to get the order. If, in addi- 
tion, you extend any credit in connection with 
the transaction, you will have to add to your 
C. I. F. quotation the interest on the money 
for the period of the extended credit. 

C. I. F. AND E. 

In some British Colonies, firms do business 
on an exchange basis, and ask for quotations 



178 M B C OF. FOREIGN TEADE 

C. I. F. with the cost of exchange added. That 
is what C. I. F. and E. means. In that case, 
you bill your goods in pounds sterling instead 
of in gold dollars, so that when you are asked 
for a C. I. F. and E. quotation, you quote the 
cost, insurance, freight and the cost of ex- 
change, calculating it first in dollars and then 
reducing it to the equivalent in pounds, charg- 
ing for the exchange. 



CHAPTER XIY 

Selling on Ceedit 

The stories frequently circulated about 
the extremely long credits which have to 
be granted, or which are being granted in for- 
eign trade, are very much exaggerated. As 
you have already seen, most foreign business 
is done on the basis of a letter of credit, which 
is established with American bankers^ and 
against which you draw. Or your customer 
sends in his order with an authority to your 
bank, or his, or his bank's American corre- 
spondents, to discount your draft against him. 
Credit in foreign trade means exactly what 
credit means in domestic business. If you start 
a new factory to-morrow and a merchant 
asks you to ship him goods, you would ship 
C. O. D., unless you personally knew him to be 
responsible, or unless his reference or credit 
rating were amply sufficient to warrant an ex- 
tension of credit. 

179 



180 ABC OF FOREIGN TEADE 

rOREIGlsr SAME AS DOMESTIC 

It is exactly the same in foreign trade. 
The new customer will not ask you for 
credit, because he does not expect it — unless he 
has done business with some very big firms in 
this country to whom he can refer. If he gives 
such references, and they report that he is 
worthy of credit, you can probably extend him 
credit without any risk and the bank will dis- 
count your draft against him, provided your 
own standing is such that your bank would dis- 
count your domestic drafts for the same 
amount under similar circumstances. 

Ratings may be had from some of the larger 
commercial agencies who have branch agencies 
and inspectors now in all foreign countries. 
Also from the banks, all of whom are begin- 
ning to collect data from countries all over the 
world, which they will be glad to place at your 
disposal. 

Do not let this question of credit deter you 
from engaging in the export business. As be- 
fore stated, much business is done on a con- 
firmed letter of credit, and even when you have 
to extend credit, the longest time asked is 
usually ninety days. 



SELLING ON CREDIT 181 

There are several well established ways in 
which you can do business with foreign cus- 
tomers. 

LETTER OF CREDIT 

Your customer can open a confirmed 
letter of credit, covering the full invoice value 
of the merchandise purchased from you, plus 
the freight and insurance, against which you 
draw according to instructions the bank will 
give you. In that case the bank with which the 
customer opens his credit will pay you the full 
amount of your invoice, including the freight 
and insurance, on presentation of your draft 
with the shipping documents, insurance cer- 
tificates, and invoice for the goods attached. 
The bank with which he opens such a credit 
will duly advise you of it. 

REMITTING DIRECT 

Your customer may remit direct to you 
the full amount of your invoice. In that 
case, you have a guarantee of his good faith, 
and can ship the goods and prepay the freight 
and insurance. With the shipping documents 
in your possession you can draw on your cus- 



182 ^ B C OF FOEEIGN TRADE 

tomer for the amount of the freight and insur- 
ance and when he accepts your draft, turn the 
shipping documents and insurance certificates 
over to him so that he may obtain prompt pos- 
session of the merchandise. You do not run any 
risk when you do this because there is practi- 
cally no chance of your customer refusing to 
honor your draft for freight and insurance on 
merchandise which he has already bought and 
paid for. If he remits the amount of your 
invoice direct to you, you will proceed as stated 
above. On the other hand, if he remits the full 
amount of your invoice to the hank^ he must 
instruct the bank to hand the money over to 
you without reservation. That is to say, with- 
out your surrendering the documents to the 
bank, as otherwise you will be out the freight 
and insurance unless he directs that you shall 
be paid the full amount of your invoice on pre- 
sentation of the freight and insurance docu- 
ments^ and that the bank shall then refund you 
the freight and insurance and collect it from 
him. In that way, the credit which he has 
opened is applicable only to the merchan- 
dise, and the freight and insurance must 
be collected by the bank instead of by you; 



SELLING ON CREDIT 18S 

but if you have received the amount of 
your invoice, and the bank has refunded 
to you the freight and insurance, you are 
through with the transaction. Likewise the 
customer, in that case, can arrange with the 
bank to pay you the full amount of the invoice 
on presentation of the shipping documents, but 
instead of paying you the freight and insur- 
ance besides, the bank will draw on your cus- 
tomer, so that you get your money when it has 
been collected. This is exactly the same as if 
he had remitted the money to you in the first 
place and you then had drawn on him for the 
freight and insurance, with the exception that 
you do not get the money until you have 
actually shipped the merchandise, which will 
be evidenced by the shipping and insurance 
documents which you give to the bank for 
collection. 

PEOPER EEFERENCES 

You can allow the customer a credit of 
say, thirty, sixty or ninety days, if he will 
furnish you with proper bank and mercantile 
references. In that case, he would not open a 
credit^ nor would he remit to you, but you 



^184 ABC OF FOEEIGN TRADE 

would draw on Mm at thirty, sixty or ninety 
days' sight, as the case may be, with shipping 
documents attached. If he accepts the draft 
and his acceptance is O. K'd. by your bank's 
correspondent in that country, he gets the 
shipping documents^ If you can get your cus- 
tomer to send you with his order a letter from 
his bankers guaranteeing the payment when 
due of your draft on him for amount of invoice, 
freight and insurance, you will find no diffi- 
culty in discounting your draft even with 
thirty, sixty or ninety days' credit attached- 
As you can readily see, very much will depend 
on your own home town bankers. All the 
larger financial institutions see the necessity 
and advisability of financing such drafts, but 
in the smaller towns, the banks do not know 
about foreign trade customs and are not in- 
clined to discount foreign paper. In that case, 
it is up to you to educate them ; but if you fail 
to arrange the accoromodation, go to a larger 
bank in one of the big shipping ports where 
the export business is known and understood, 
and do your banking there. No business is 
possible without capital or without credit from 
a bank, and if you can not get support from 



SELLING ON CREDIT 185 

your local bank, then you had best take your 
foreign business elsewhere. Possibly you have 
reason to know from experience that most 
bankers believe they support their customers 
because they lend them money, and lose sight 
of the fact that if their customers did not sup- 
port them by giving them the opportunity to 
lend such money, the need for the bank as a 
business institution would be pretty much 
eliminated. Most real bankers, when it comes 
to foreign trade, wiU be very glad to cooperate 
mth you, but in the smaller towns, and even 
the smaller ports, you may find it difficult to 
arrange for a legitimate accommodation. 

CASH 

Practically all American export houses and 
manufacturers, in their foreign trade rela- 
tions, have asked their foreign customers to 
send cash with their first order, or establish a 
credit to take care of it. This has been educa- 
tional work. The story of the Germans and the 
long credits which they were giving has kept 
many American manufacturers out of foreign 
trade. Then came the American who decided 



ISe .K B G OF FOEEIGN TEADB 

to go after foreign trade, but not to give credit. 
He simply demanded cash for his goods, either 
with the order, or by credit in New York, 
which is practically the same thing. He kept 
on asking for cash with the result — and it is 
perhaps not fully realized — ^that while the Ger- 
mans have educated their clients to ask for 
long credits, the American manufacturers and 
exporters have educated them to a consider- 
able extent to pay cash. 



CHAPTER XV; 

Bank Credit 

A draft for export is made out exactly as is 
your domestic draft. However, it is made 
out in duplicate, the duplicate being marked 
and used as a follow-up in case of loss or non- 
arrival of the original at its foreign destina- 
tion. There are two kinds of credit. One is 
confirmed and the other unconfirmed credit. 
Either of these credits may be cash or ac- 
commodation credits. Cash credit means that 
you draw a draft at sight, and get paid on pre- 
sentation; whereas accommodation credit 
means that you grant a credit of from thirty to 
ninety days or whatever other arrangement 
you make with your customer, in which 
case American bankers, who hold the credit, 
will discount your draft on presentation. 

CONFIEMED CREDIT 

A confirmed credit means that the credit has 
been established by your customer with your 

187 



188 ABC OF FOREIGN TRADE 

bankers or with the American correspondents 
of his bankers, authorizing them to pay 
your draft on presentation of your invoice with 
the bill of lading and insurance certificates, or 
such other documents as the bank may 
require, attached to same. The letter of 
credit will stipulate a certain date on which 
you are to present your draft. This depends 
on the time your customer can wait for your 
merchandise, or on when you have agreed it 
shall be delivered; or if he does not care to 
bind you to any time of delivery he simply 
states that the time is unlimited. If you pre- 
sent your draft with the documents attached 
which the bank requires — consisting usually 
of the steamer's bill of lading, insur- 
ance certificate and your own invoice — on 
or before the time when the credit expires, 
your draft is cashed, even if you give time 
on the face of your draft. This is the only 
kind of credit you ever want to extend, because 
unconfirmed credit means practically nothing. 
Some of the leading bankers have been 
fighting the unconfirmed credit because it 
gives the customer the right at any time 
to cancel. You can imagine what that might 



BANK CREDIT 189 

mean to you. Suppose your customer opened 
a credit in your favor for $35,000 for a lumber 
cargo. You go ahead and cut the lumber to the 
dimensions specified and by the time you are 
ready to ship the customer cancels the credit. 
Or let us say he buys from you canned goods or 
steel at a certain price. The price goes down, 
and your customer backs out of the deal and 
cancels the credit arranged. You have bought 
or manufactured the goods and they remain on 
your hands, possibly at a heavy loss. Let us 
suppose he has asked you to manufacture a 
thousand pieces of your product with a specific 
inscription on it or under a private brand that 
nobody else can use ; and he cancels the credit. 
You naturally have a dead loss. If your cus- 
tomer means business and intends to stand by 
his deal, he will not refuse to open a con- 
firmed credit for you. 

THE BANK CHAKGES 

When your customer opens a letter of 
credit, he can do either one of two things. He 
can cable or send the actual money to the bank 
here or he can by letter or cable open a book 
credit, which means that his bank cables its 



190 ABC OF FOREIGN TEADE 

American correspondents to pay you on pre- 
sentation of the necessary documents. It is im- 
material to you wMch procedure your cus- 
tomer follows, and is mentioned merely to show: 
how your customer may transmit the money. 
It should always be understood between your 
customer and yourself, and between your 
banker and yourself, who is to pay the bank 
charges, but unless otherwise specified the 
usual rule is that the foreign customer pays 
both the exchange and the bank's charges on 
the transaction. 

DKAFTS 

If your draft is drawn in the currency 
of the country in which your customer resides, 
you will charge the exchange to the customer. 
If you extend credit on your draft, the draft 
should include interest for thirty, sixty or 
ninety days, or for whatever period the credit 
is given. If you make an exchange draft, ob- 
tain quotations from various bankers, espe- 
cially if the draft is a large one, and give your 
customer the benefit of the most favorable quo- 
tation. When you present your draft to the 



BANK CREDIT 191 

bank, write them a letter of instructions, and 
ask them to deliver the documents to your cus- 
tomer on acceptance of the draft, or on pay- 
ment. Also write a letter to your customer 
advising him that you have forwarded the 
documents, and made presentation of the 
draft, so that he may be prepared for its 
acceptance. If you draw an exchange draft 
at sight, you do so at the ruling rate for 
pounds sterling, if that is the currency of the 
country on which you draw your draft, but if 
you give credit, the exchange rate is higher 
naturally, the interest being included, as al- 
ready mentioned. If your customer sends you 
a letter of guarantee through his bankers or 
their American correspondents, you can 
handle the whole transaction just as if a letter 
of credit had been opened. 

OPEIsr BOOK AND MEECHAISTDISE CREDITS 

If you do an import business with the cus- 
tomer to whom you export, or if you agree on 
a monthly, half-yearly, or yearly settlement of 
^accounts with him, you should do business 
on a book credit basis, debiting him for the 



192 A B OP FOEEIGN TEADE 

goods you ship Mm and crediting Mm 
with the goods you buy. As a matter of 
fact, you handle his account just as you would 
handle a domestic account, and then draw a 
draft on your customer at the time you send 
Mm a statement. This method of business, 
however, will not develop until your foreign 
trade is well established. 



INSUKANCE 

Marine insurance is such a complicated and 
diversified branch of the insurance business 
and of foreign trade that it requires special 
study, and in fact should require a special book 
to cover it fully. But unless your business de- 
velops to enormous proportions, it would 
hardly be worth the time and effort you would 
have to spend to master it. 

THE BROKER 

It is therefore advisable and much more 
practical to go to the insurance people for your 
marine insurance and for all information 
about it. Treat this sentence literally. 



BANK CEEDIT 193 

Don't go to anybody but to an insurance 
broker or an insurance company for insurance 
rates on your cargo. Don't go to a freight for- 
warder. Don 't go to your banker. Don 't go to 
the man who handles insurance as a side line. 
Go to a legitimate insurance broker, and be 
sure that he really handles and has handled 
marine insurance ; that he expects to handle it 
in the future, and that he knows the business. 
If the shipment is big, get your insurance 
quotations from several brokers, just as you 
should go to several freight forwarders for 
freight quotations. Then give the business to 
the best qualified man, provided his rates are 
as low as those of his legitimate competitors. 

FOLLOW IlSrSTKUCTIOKS 

Always follow the instructions given by your 
insurance agent. In the first place, if he ad- 
vises you to take out insurance against fire, 
which has to be specifically inserted in a marine 
insurance policy, do so. If he advises you to 
take out merely a marine insurance policy, take 
out a marine insurance policy only. The 
bank generally tells you what certificates to in- 



194 !A: B C OF FOEEIGN TEADE 

elude when you present your draft. If tlie cus- 
tomer asks you to insure through a certain 
company, do not fail to do so because he is 
likely to have some very weighty reason for 
giving you such instructions. On the other 
hand, if he asks you not to insure, do not in- 
sure under any circumstances, as this means 
that he wiU attend to the insurance himself. 
Naturally, your customer is interested to the 
extent of the full amount of the cost, plus 
freight and insurance premiums, paid for the 
merchandise. In other words, if he bought a 
thousand dollars' worth of goods for which the 
freight is $300, and the premium for insurance 
is $50, he is interested in the shipment to the 
extent of $1,350. His profit, however, is not 
yet included and to cover this and also inci- 
dental expenses, it is usual to insure the goods 
for 10% over and above the actual value thus 
represented. That is to say, you would insure 
this particular shipment for $1,350 plus 10% 
or $1,485. On the other hand, your customer 
may have sold the goods at a higher price when 
he ordered them from you and wishes this 
margin to be covered plus his 10% profit, and 



BANK CREDIT 195 

he may instruct you to insure it slightly higher. 
If he does make such a request, do not fail to 
follow it implicitly. 

MARINE INSURANCE 

Marine insurance is necessary because a ship 
owner has no liability as long as he has taken 
due precautions and has exercised diligent care 
to see that the ship is seaworthy before she 
starts on her journey. A marine policy covers 
only loss caused by the sea, but not breakage, or 
leakage, or theft. If you wish to insure also 
against loss or damage by fire, this must be 
covered by a special clause in the policy, which 
also generally covers the goods for speci- 
fied times and places, such as while they are on 
the docks, or in the custom-house at desti- 
nation. 

Insurance certificates are usually issued 
with an F. P. A. clause which means ^^Free of 
particular average. ' ' That is, a claim can only 
be made if the damage exceeds a certain 
amount, which has been fixed in advance. This 
rule has been adopted by a number of insur- 



196 :A: B OF FOEEIGN TEADE 

ance companies in order to eliminate a great 
number of petty claims. 

Insurance companies, for the purpose of pre- 
venting petty claims, etc., make policies pro- 
vide that damage shall not be claimed or paid 
unless it amounts to a certain percentage of 
the value of the merchandise so insured. It is 
exactly the same with some automobile insur- 
ance companies specifying in their policies 
that you can not make a claim for damage to 
your car, which amounts to less than $100.00. 
In the marine insurance business, this is called 
the ^^ Franchise'' and the insurance referred to 
as ^^Free of particular average." This is a 
part of nearly all marine insurance policies 
and only now and then is it replaced by ^^with 
average'' or ^^all risks. '^ 

EVERY DETAIL 

Always round off your figures for insurance 
purposes. In other words, if the amount to be 
insured is $1,333, make it $1,335, and be sure to 
specify to the insurance company what you 
want to insure, the number of cases, the mark- 
ings and every detail you can possibly give, in 



BANK CEEDIT 197 

order to identify the merchandise in case of 
loss or damage. 

Merchandise should be insured from the time 
it leaves the factory until it is in the possession 
of the foreign buyer. To avoid trouble, follow 
the insurance instructions of your buyer at all 
times. Insurance should cover for thirty days 
after arrival at destination, cover for the time 
on docks, at customs warehouse, etc. The buyer 
may consider that you have covered him for 
too much, or for too long a period, so it is best 
that he give you instructions. In many 
cases your customer will affect his own insur- 
ance, and if he wishes any special insurance 
he will tell you so. This is all you have to 
know about insurance, for the practical han- 
dling of export business. 

In the foregoing chapters you have learned 
how to offer your goods, prepare, ship and fill 
your foreign orders, draw or collect for and 
insure the shipments and thus handle your ex- 
port yourself. 



CHAPTER XYI 

Ameeican Expoet Houses 

If you do not wish to maintain your own ex- 
port department and handle your own export 
business then it is quite possible and feasible 
to do it through an American export house or 
an agent who acts as your distributor for all 
or for part of the foreign markets. 

In selecting your export agents, it is simply 
a matter of business prudence to investigate, 
just as you would when considering agents for 
your product in this country, the character 
'and ability of your would-be agent, his finan- 
cial circumstances, organization and estab- 
lished channels and connections for the sale 
of your product. It is poor policy to give any 
one agent more business than he can handle. 
It is just as unwise to have a large concern 
represent you who would turn the actual con- 
duct of your business over to an employee. 

CHoosmG Aisr agent 

If you decide to let your export business be 
handled by an agent, the step demands your 

198 



[AJMERICAN EXPOET HOUSES 199 

very serious consideration. A. wrong start 
may require a great deal of time, effort and 
money to right again. It goes without 
saying that you do not want any one to han- 
dle your line whose integrity is open to ques- 
tion. As far as his o\\Ta capital is concerned, 
however, this depends very largely upon his 
methods of doing business, and his experience, 
ability and connection are prime factors to be 
considered by you. If the agent handles all his 
foreign business on a letter of credit basis, as 
outlined in a previous chapter, his financial 
standing is not a matter of special importance. 
In other words, if he merely places orders for 
you, after arranging with the foreign pur- 
chaser for a letter of credit in your name, cov- 
ering the amount of the order, then his 
financial standing does not enter into the mat- 
ter at all. On the other hand, if the agent buys 
merchandise for his own account, using the 
credit which has been established in his own 
name, and pays you only after he himself has 
drawn against it; or, if he buys merchandise 
from you for his own account and sells it to his 
customers, giving credit terms to the latter, 
then of course it is very essential for you tq 



200 ABC OF FOREIGN TRADE 

know that he is financially responsible, because 
in that event, he is really the buyer. 

An agent seeking to represent you for your 
foreign business should be able to show you 
that he is experienced and has actually trans- 
acted foreign business successfully, and that he 
is familiar with the various phases of foreign 
trade. 

GRGAlsriZATION' 

If yon were to handle your export yourself 
you would organize a competent foreign de- 
partment. You therefore would expect the 
agent to have a thoroughly competent organi- 
zation for the handling of the business. If the 
agent has a well established selling organiza- 
tion which otherwise you would have to create 
for yourself, it will save you time, money and 
effort to employ him and to utilize his organi- 
zation^ but be absolutely sure that his organ- 
ization really exists before you employ him. 

CONNECTIONS 

The same applies to the agent's local con- 
nection. An agent who has good connections 



AMERICAN EXPORT HOUSES 201 

with large buyers in foreign countries, main- 
taining his own branches or sub-agencies in 
the more important foreign trade centers, who 
handles business not only by mail but also by 
personal representation, is naturally in a posi- 
tion to render you most valuable service. 

The various methods which different agents 
employ require your careful consideration, es- 
pecially as to their adaptability to your own 
line of business. An agent may simply sell 
merchandise for you on a commission basis. 
In which case, he is expected merely to nego- 
tiate sales. There are certain advantages in 
such an arrangement, in that the agent be- 
comes virtually nothing more nor less than 
your export manager, because he sells your 
merchandise at prices which you fix yourself, 
the goods are billed on your invoice, you re- 
ceive payment yourself, the customer deals 
directly with you, and you do not lose contact 
with him. 

DISADVANTAGES 

However, there are also several disadvan- 
tages in this method. You assume all of the 
responsibility and all of the risk, in case any 



202 ABC OF FOEEIGN TRADE 

credit is given. If your agent makes a mistake 
or antagonizes the customer, the complaint will 
come to you and you will be held responsible. 
You may have had no connection with the cause 
of the complaint, which in most cases will not 
refer to the merchandise but to the manner in 
which the shipment has been handled. On the 
whole, it seems advisable, once you decide to 
have an agent, to let him handle the entire mat- 
ter. Otherwise, handle the business yourself. 
Half-way methods are seldom commendable. 
It does not work out very satisfactorily to let 
some one else sell your goods and handle the 
shipping, without carrying or at least sharing 
the responsibility. Therefore, if you employ 
an agent, let him assume all the responsibility 
with the customer. In that case, he would be- 
come really the buyer of the merchandise. He 
would order from you as soon as he received 
an order himself, ship and bill to the pur- 
chaser on his own invoice. 

THE AGENT^S PEOFIT 

In such case the agent will establish his own 
discounts, unless you provide specifically in 
the contract with him that you are to establish 



AMERICAN EXPORT HOUSES 203 

the terms. For the reasons previously ex- 
plained, you should at any rate never allow 
the agent to sell the merchandise at a higher 
price than your American retail or list price. 
If he makes a profit, this profit should be the 
difference between the discount which you al- 
low him and the discount which he allows his 
customer. Naturally, if you handle your own 
export business and bear all the expenses of it, 
your price would include a reasonable amount 
for your overhead. An agent saves you the 
expense and is therefore entitled to an extra 
discount. If he adopts your scale of discounts 
and retains for himself say a five per cent, 
commission on each order, it would standard- 
ize the selling prices, and at the same time 
maintain and protect your American list 
prices. 

PAYMENTS 

As regards payments by the agents to you, 
this is a matter of agreement. In cases where 
he invoices the goods himself, the letter of 
credit, under which he operates, is opened in 
his name, not yours. If, therefore, the agent is 
financially quite able to handle the business and 



204 ABC OF FOREIGN TRADE 

to pay you promptly on delivery of the mer- 
chandise to him, you have nothing to do with 
the letter of credit. The agent, as previously 
explained, can not touch the money in the bank 
until he presents a steamer's bill of lading and 
other documents to the bank holding the credit 
— ^the steamer's bill of lading being the docu- 
ment issued by the steamer acknowledging re- 
ceipt of the merchandise. 

JOINT CEEDIT 

Unless the agent is a big concern, however, a 
much more satisfactory and a much surer way 
for you to protect yourself will be to have the 
agent turn the credit over to you, or give you 
a letter, a copy of which he sends to the bank, 
agreeing that he will only draw against credit 
jointly with you. Let us suppose that the bank 
has received $1,000 from one of your agent's 
customers in the form of a credit to cover $700 
worth of your merchandise, and $300 freight 
and insurance. The credit being in the name 
of the agent, you have no control over it except 
in joint signature with the agent. However, if, 
immediately upon receipt of the credit, your 



AMERICAN EXPOET HOUSES 205 

agent should advise the bank that the credit is 
for the purpose of purchasing from you $700 
worth of your merchandise, and confirms in 
writing that he will not touch this credit except 
in payment of his order for the merchandise, 
then of course you are fully protected. The 
bank is in a position to inform you that a credit 
has been opened in your agent's name, but that 
he has agreed not to draw against it except for 
the payment of your merchandise, so that you 
immediately have an interest or an equity in 
that credit. In that way, you may safely pro- 
ceed to manufacture the goods and deliver the 
railroad or steamship bill of lading to your 
agent, who will then hand the bill of lading to 
the bank, and ask the bank to pay your invoice 
in full at that time. Or the railroad bill of 
lading may go direct to the bank to be handled 
through its correspondents at the port until 
the steamer bill of lading is obtained. The 
bank will then pay you upon receipt of the 
ocean bill of lading and the other documents, 
the full amount of the invoice, freight and 
insurance. In like case you have no risk. 
The bank will also pay the agent the margin 
to which he is entitled, being the difference be- 



206 :KB G OE FOEEIGN TRADE 

tween your invoice and Ms own when the trans- 
action is completed. Let us illustrate this by a 
specific domestic example. Suppose you were 
a manufacturer in Indianapolis and you 
were making a shipment through your agent to 
an apple orchardist in Oregon. The shipment 
for which the buyer has made a remittance to 
the agent's bank in Portland amounts to 
$1,000, of which $700 is to cover the cost of the 
merchandise, $200 the railroad freight, $10 the 
insurance and $60 the transportation from 
Portland, Oregon, to the apple orchard in the 
interior of the state by a local railroad, and 
$30 the agent's profit. The bank advises the 
agent that the money has arrived in his name, 
and that they have instructions from the 
buyer to pay him — ^the agent — ^the amount of 
his invoice as soon as he presents a railroad bill 
of lading to the final point of destination. Now 
the goods and the transcontinental railroad 
play the same part in this transaction as they 
would in any export shipment, and the local 
railroad takes the place of the steamer. 

The bank, therefore, can not pay out the buy- 
er's money until the local railroad (or the 
steamer) bill of lading is obtained. 



AMERICAN EXPORT HOUSES 207 

Now, the agent comes to you and places an 
order with you for $700 worth of your product 
and advises you that the money is in the bank 
at Portland^ Oregon, that he will have the bank 
confirm this fact to you and state also that it is 
there for the purpose of paying your invoice 
and that it will not be paid out except for your 
invoice for this particular purchase. The agent 
goes to the bank, acknowledges the credit, 
which is there for him and deposits a written 
statement to the effect that the credit is for 
your merchandise up to the value of $700, and 
that he will not use that part of the credit ex- 
cept to pay you, thereby authorizing the bank 
to reserve $700 out of this credit for that pur- 
pose. The bank, having such a confirmation 
and agreement in its possession is therefore 
in a position to advise you that your agent has 
instructed them that $700 out of the credit 
opened in his name is to be held for the purpose 
of paying your invoice, and that the agent has 
agreed not to use this money or draw against 
it except for the payment of your merchandise. 

Upon receipt of such a letter from the bank 
you can safely manufacture or fill the order 
from stock. As soon as the merchandise is 



208 ABC OF FOEEIGN TEADE 

packed, the agent will instruct you to sMp to 
Portland, where he has to reload it on the local 
railroad, as explained. You ship the goods to 
Portland on the railroad bill of lading which 
gives you title to and possession of the mer- 
chandise. If the bank knows the agent well and 
trusts him it may be willing to pay your invoice 
on presentation of the railroad bill of lading, 
if the agent assures the bank that shipment 
will be transferred at Portland, and that 
the local bill of lading will be secured. If 
not, the bank may ask to have the railroad 
bill of lading delivered to it against pay- 
ment of your invoice, and send the railroad bill 
of lading to its own correspondents in Port- 
land, asking them to have some one deliver the 
goods to the local railroad, paying the local 
railroad's (or in case of export shipments, the 
steamer's) freight to obtain the bill of lading 
and send it to them. 

In both cases, the local bill of lading 
must come back to the bank before it can 
pay the agent's invoice, as the agent's in- 
voice must have the local bill of lading (or 
steamer's) attached to it; but the bank can of 
course at all times advance against the credit 



AMERICAir EXPORT HOUSES 209 

at its own discretion for the payment of the 
merchandise, freight and insurance, and pay 
the agent after the local biU of lading has been 
obtained. 

On the other hand, if the bank does not 
wish to advance any money for the mer- 
chandise until the local bill of lading is actually 
in its possession, then for your protection in- 
stead of delivering the railroad bill of lading to 
the agent, you can deliver it to the bank with in- 
structions to get the local bill of lading for your 
account in exchange for the railroad bill of lad- 
ing, and to insure the goods. On receipt of the 
local bill of lading the bank will then pay you 
the amount of your invoice, freight and insur- 
ance, all of which you advanced, out of the 
credit. The moment the bank has the local 
(or steamer) bill of lading, it can pay out the 
full $1,000 which would then include not only 
the amount of your invoice, but also the full 
amount of the agent's invoice, which would 
necessarily be higher than yours, as it will in- 
clude his charges and his profit, and the freight 
and insurance which either the agent, the 
bank's Portland correspondent or you have ad- 
vanced. 



210 ABC OF FOEEIGN TRADE 

Therefore, having the letter of credit made 
available to yourself, or unavailable except for 
pajonent to you, you are fully protected. This 
method of dealing with the agent is strongly 
recommended, and should also be acceptable to 
the agent, because it does not interfere in any 
way with his own handling of the transaction. 
However, if the agent grants credit to his cli- 
ents, you want to make sure that your mer- 
chandise shall be payable against the railroad 
bill of lading only, so that the title and posses- 
sion of the goods does not pass to the agent un- 
til he pays for same. 



CHAPTER XVII 

Teeritory and Agents 

TMs is exceedingly important. Unless the 
agent has branches or personal residential for- 
eign agents, actual connections, correspondents 
or sub-agents, and has himself actually visited 
the countries in which he intends to do busi- 
ness, he will have to build an organization for 
your product from the ground up, just as you 
would have to build it up yourself, and thereby 
defeat one of the principal reasons why you em- 
ploy an agent. All things being equal, the best 
kind of an agent to employ is one who has trav- 
eled personally and extensively as this is natur- 
ally a very decided advantage. If you contem- 
plate entrusting your foreign trade to such an 
agent to save time, money and effort, then 
every advantage the agent has is also your 
advantage. If he has had personal con- 
tact with his customers in their own country, 
he will be able to help you immediately in 
building up your business with them. The ter- 

211 



212 ABC OF FOREIGN TEADE 

ritory wMcli you allow your agent to handle 
should be determined largely by Ms established 
connections and by his past experience as evi- 
denced by the volume of business he has trans- 
acted with the country in question. There are 
agents who operate all over the globe; a great 
^any specialize in certain territories, such as 
the Orient, Africa, Europe, etc., while others 
cover smaller sections of country, but whatever 
they handle, they should prove to you they are 
actually doing business in that territory at the 
time the contract is entered into and that they 
have an uninterrupted exchange of corre- 
spondence with clients in that country. 



THE MINIMUM VOLUME OF BUSINESS 

It is the wiser policy to confide to an agent 
only such territory in which he has resident 
sub-agents, or correspondents for all of the im- 
portant accounts. However, having looked 
into the applicant's business, you will get a 
pretty good insight into his qualifications, for 
each individual market. None of the agents 
will buy any merchandise except when he 



TEREITORY AND AGENTS 213 

has obtained an order from a foreign client. 
Therefore, yon can not close a contract with 
him obligating him to buy a certain amount of 
merchandise yearly from you, because an agent 
\Yorking on commission is not a merchant, and 
should not contract to buy something that he 
has not yet sold. On the other hand, you natu- 
rally wish to be protected, in case the agent 
does not develop a certain minimum volume of 
business and satisfy you in every other respect. 
This minimum can be determined beforehand 
by mutual agreement. One factor is the quan- 
tity of your product which you will be able ta 
spare from your domestic market, for foreign 
consumption. Tour purpose in seeking a for- 
eign market is to absorb such part of your pro- 
duction for which you have to find an outside 
market in order to maintain your manufactur- 
ing schedule or to increase your output and 
turnover. The next factor which enters into 
the calculation is how much of your product 
can actually be sold in foreign markets. This 
depends on the product itself, but with the as- 
sistance of a competent agent you should be 
able to approximate closely the amount which 
can be sold in foreign markets. 



214 ABC OF FOEEIGN TRADE 

REASONABLE TIME 

iWhen you determine this amount, common 
sense and ordinary business judgment will be 
very helpful. Remember, it will take some time 
before the agent can introduce your merchan- 
dise, just as it would take you some time if you 
should handle this department yourself, and 
undertake by mail, as suggested in a former 
chapter, to create a foreign market for your 
product. Your agent may have excellent con- 
nections, but these connections may never have 
heard of your merchandise, and will have to 
be advised by the agent, just as you would ad- 
vise prospective customers in foreign fields of 
all the details of the article you are manufac- 
turing. Therefore, give the agent a reasonable 
time to place your line before his branches, 
personal representatives, correspondents, sub- 
agents, and other connections ; to induce them 
to order sample shipments ; then to get out the 
sample shipments, and give them time to ar- 
rive at their destination, so as to create a de- 
mand for your product which will mean real 
business and develop into quantity orders. 



TERRITORY AND AGENTS 215 

PEECENTAGE OF INCKEASE 

The best way, therefore, to protect yourself, 
will be to allow your agent a reasonable time in 
which to reach a minimum amount of sales, 
which is to determine whether or not he has 
made good. If he produces sales amounting to 
an agreed sum at the jend of the first trial 
period, let him continue as your agent for a 
further period of the same duration, with the 
provision that his sales show a certain increase 
over the preceding period. It is not unnatural 
that the first year will not be so good as the sec- 
ond year, and the second not so good as the 
third year. The percentage of increase which 
the agent should produce from period to period 
depends very much upon the product itself. It 
may be anywhere from 10 to 50%, the aver- 
age, in most cases being about 25 % . Let us say 
that you would make an arrangement with 
your agent, allowing him to demonstrate his 
ability and selling qualifications during one 
year, stipulating that he is to produce at 
the end of that time a minimum total of sales 
I amounting to, say, $40,000. If he reaches 
or exceeds his sales minimum the contract is 



216 :^ B C OF FOREIGN TRADE 

to continue for another year, and if within the 
second year he sells at least 25% more than 
during the first year, viz., $50,000, the agree- 
ment is to continue for a third year. If during 
the third year he sells 25% more than during 
the second year, viz., $62,500, the contract will 
again be renewed and so on from year to year, 
the sales during the current twelve months to 
be always 25% more than during the preceding 
year. 

It is not necessary to have this arrangement 
run indefinitely. It can be stipulated that the 
agreement shall continue from year to year for 
a total period of say five years after the first 
or trial period, or any length of time that 
you mutually agree upon. In this way, it is 
up to the agent to make good and to keep on 
making good if he is to continue handling your 
product in the territory contracted for. 

FOREIGN RESIDENT AGENTS 

Whether you handle your business yourself 
by mail or through an American agent you will 
probably arrange, at some time or other, for 
a foreign representation. After your product 



TEREITORY A^I) AGENTS 217 

has been introduced, you will be fairly over- 
whelmed in the beginning with applications to 
represent you exclusively. An exclusive agent 
really has a monopoly of your product in his 
country and receives a commission or profit on 
€ach sale or shipment to that country. 

When selecting a foreign agent, you should 
be even more careful than you are in choosing 
a local agent. Exactly the same qualifications 
are required except that they apply only to his 
individual country or territory. An agent in 
Japan, for example, in order to be fully quali- 
fied, should have offices, branches, agencies or 
sub-agencies in such important trade centers 
as Yokohama, Tokio, Osaka, etc. You would 
not think of appointing an agent for the 
Pacific Coast who had an office in Se- 
attle, but none in Tacoma, Portland, San 
Francisco and Los Angeles. So you should 
not think of appointing an agent for a foreign 
country who is not similarly and thoroughly 
established. The foreign agent, like the Amer- 
ican agent, can operate in two ways in repre- 
senting you. He can buy for his own ac- 
count, which is much the better way for you, 
for then he will open a letter of credit just 



218 ABC OF FOREIGN TEADE 

like any otlier foreign customer for the pur- 
chase of merchandise and you will sell and in- 
voice the goods to him. Or he can sell direct as 
your foreign agent receiving a commission 
from you after the merchandise is paid for, 
just as the American agent, working on a com- 
mission basis, would receive it. It is to your 
advantage to arrange for a resident foreign 
agent, but only provided you get the right 
agent. The local man has close affiliations with 
local firms, is in constant contact with them, 
can give them information on the spot, con- 
cerning prices, packing and deliveries, etc., 
which they could not get otherwise except by 
writing or cabling to you in the United States. 

LOCAL ADVANTAGES 

He is probably socially, or in a business way, 
acquainted with a great many consumers of 
your product. In other words, he has all the 
advantages that your local agent in San Fran- 
cisco would have as against an organization 
trying to sell your product by mail in that ter- 
ritory. If that acquaintance, connection and 
local residence is accompanied by ability, 
trustworthiness and salesmanship you have a 



TEERITORY AND AGENTS 219 

combination that is ideal and is sure to prove 
successful. Here again, you can protect your- 
self in exactly the same way you protect your- 
self with your American agent — ^by stipulat- 
ing that the agency shall continue only if the 
sales reach a certain amount. Some manufac- 
turers insist on having this form of a guaran- 
tee or else a definite order. While it is quite 
feasible to require this from general im- 
port houses, in foreign countries, as explained 
later — ^it is not always possible to exact it from 
a resident agent. An agent, working on com- 
mission only, whether he resides in this country 
or in any other country, can not buy merchan- 
dise that he has not already sold, unless he 
speculates. All you can do with an agent is 
to place him in a position to make such sales 
possible, and at the same time protect yourself, 
both as regards payment and the right to can- 
cel your agreement if the agent should not 
comply with his obligations imder the contract 
or show satisfactory results. 

EXCLUSIVE AGENCY 

If you appoint a resident agent for a certain 
foreign territory, all orders or inquiries from 



220 ABC OF FOEEIGN TRADE 

that territory must be turned over to him and 
he must be fully protected, just as your Amer- 
ican agent would be in a specified American 
territory. It is very important for you to re- 
member this, because otherwise a resident 
agent who has a contract to represent you ex- 
clusively can cause you trouble if you enter 
that territory or allow any one else to ship into 
it and compete against him. He can disturb 
your trade relations with that country^ keep 
your merchandise out, or even undermine and 
destroy your business there entirely. It is only 
natural that the foreign agent, having an ex- 
clusive contract, and having spent time, money 
and effort in establishing your line, should ex- 
pect to be protected, and that he will be antag- 
onized if such protection is not granted to him. 
He is entitled to it under all circumstances. 

BKOKERS 

Brokers in the export field are just like bro- 
kers in any other field ; they buy or sell goods 
on commission and charge a brokerage 
fee for doing it. Brokers usually do not deal 
in manufactured articles, but principally 
in raw products and bulk stuff. If you 



TERRITORY AND AGENTS 221 

produce a manufactured article, the broker 
will not appear on your business horizon at all. 
If, however, you can produce anything which 
is handled by a broker, he will approach 
you when he is in the market, and if he buys, 
he will buy at your lowest price and charge his 
client the brokerage fee, unless you have agreed 
to pay the brokerage yourself. In other words, 
the foreign broker does business on exactly the 
same basis and in exactly the same way as the 
domestic broker, 

COMMISSION HOUSES 

A commission house does exactly what the 
commission agent does, but instead of dealing 
with an individual, you deal with a firm. 
The commission house either books orders 
in your name, which you ship, bill and 
collect for, obtaining from you after the com- 
pletion of the sale a commission on the total 
invoice value or a commission on the profits, 
as you may have agreed; or the commission 
house sells the merchandise, which it ships and 
bills on a commission basis, represented 
by the difference between the discount you 



222 A B C OF FOREIGN TEADE 

grant them on your American list price and the 
discount they grant to their clients. Exactly 
the same principles, exactly the same arrange- 
ment, exactly the same methods and exactly 
the same basis for choosing a commission house 
•should be employed by you, as set forth in the 
chapter dealing with the selection of an Amer- 
ican agent. 



CHAPTER XYIII 

ExpoKTERS^ Importers and the Webb Bill 

The term exporter is often loosely applied to 
anybody who ships merchandise to foreign 
countries, but an exporter in the correct sense 
of the word is quite distinct from an agent. 
Exporters or exporting houses buy merchan- 
dise for their own account and sell for their 
own account, just as any domestic merchant 
does who buys your goods and sells them at his 
own prices. 

THE exporter 

The exporter, therefore, is a direct con- 
sumer and really takes the place of a foreign 
customer. He buys your merchandise, stores 
it until he can sell it, bills it and collects for it. 
He will contract for vour merchandise and sell 
it before you deliver it; or he will buy your 
merchandise when he has orders for it. But 
whatever he buys, he buys outright. The ex- 
porter will be a real customer, whether you 
undertake to build up your foreign trade your- 

223 



224 ABC OF FOEEIGN TRADE 

self or whether you employ an agent to do it. 
The exporter is nothing less than a foreign 
buyer, located in America. He will, therefore, 
expect the same consideration and treatment 
you grant to your customer in foreign coun- 
tries. He is entitled to it. The exporter, in 
most cases, will ask for the agency for the 
foreign territory in which he is operating and 
in which he has connections on a definite pur- 
chase basis. The large exporting house, there- 
fore is not only in a position to make arrange- 
ments with you to handle your product, but 
also to give you a guarantee of a minimum 
quantity to be purchased during the period of 
the contract. In other words, where an agent 
has to wait to learn what orders he can get and 
places them only when he gets them, the ex- 
porter is the actual buyer and can determine 
himself what quantities to buy. 

SPECIFIC MONTHLY SHIPMENTS 

In this way, the exporter is able to contract 
for your agency on a definite basis, stipulating 
the exact amount to be purchased from you 
per annum, to be increased, kt us say, every 
year. Such contracts should always designate 



EXPORTERS AND WEBB BILL 225 

specific montlily shipments, in order to enable 
you to adapt your production and should be 
arranged in proportion to the total quantity. 
All payment conditions and other details are 
easier to handle because the exporter is a di- 
rect account and will pay you on delivery of 
the merchandise, either directly or through his 
bankers. 

To be sure, there are large exporters and 
small exporters and you must use proper care 
when making your selection. It is not always 
necessary to give an exporter a contract un- 
less the account is a desirable one. The great 
advantage you have in dealing with the ex- 
porter is that he is right here in this coun- 
try where he can get into direct and prompt 
communication with you. The convenience 
and the value of this to you is obvious. He is 
a foreign buying account doing business in the 
same way and on the same terms as your do- 
mestic buyers. 

U. ^. EXPORTERS 

If you start your own export department 
by mail, the exporters in this country will be 
on your mailing list because for all practical 
purposes they are foreign firms doing business 



226 ABC OF FOEEIGN TRADE 

in this country. You will approach them by 
mail in the same way you would approach 
a firm in China or India, establish the same 
connections and have the same experiences in 
doing business with them, as you would have 
with the business houses actually established 
in foreign countries. It is important, there- 
fore, whether you do your export business 
yourself by mail or through an agent in this 
country, that you should, by all means, get in 
touch with all the reputable exporters in the 
United States. They are mostly desirable ac- 
counts and if they buy from you they will 
relieve you of all responsibility and all detail 
in connection with the actual shipments of 
the goods. 

FOREIGN IMPORTING HOUSES 

An importing house is one that imports 
merchandise directly from a foreign country. 
The importer in a foreign country may be one 
of your regular customers, and you deal with 
him as such, except that both he and the Amer- 
ican export house are more or less what a 
jobber or wholesale distributor is in this coun- 
try. Every import house in every foreign 



EXPOETERS AND WEBB BILL 227 

country, every export house in this country, is 
a possible client of yours, provided your prod- 
ucts are salable in the territory in which they 
operate. The importer and exporter are 
wholesalers, who re-sell again to a large num- 
ber of clients, to a portion of whom you might 
sell direct, if, for example, you canvass them 
by mail. The foreign importer and American 
exporter, therefore, buying merchandise in 
quantities, get lower prices than the individual 
customers would get to whom you might sell 
direct. If your article is at all salable 
and * Hakes'' in the market to which you have 
introduced it, the importer and exporter will 
feel the demand for the article, and be in a po- 
sition to buy in volume, obtaining the largest 
possible discount from you and the lowest 
possible freight rates on the goods shipped. 
As the scale of discounts, based on larger quan- 
tities for higher discounts will amply compen- 
sate you, it is no disadvantage, but rather an 
advantage to deal with the American export- 
ers and the foreign (wholesale) importers. All 
the more so, as in most cases they have ex- 
cellent, well established organizations for re- 
distributing and re-selling your product, and 



I 



228 ABC OF FOREIGN TEADE 

thereby can help materially in its introduction 
in their territories. The great secret in for- 
eign trade is to get the merchandise landed in 
the foreign territory at the lowest possible 
cost. Therefore^ the wholesale importers and 
exporters who ship all kinds of merchandise 
in large quantities and thereby reduce the 
landed cost naturally are of the greatest help 
to you in your business. They help materially 
to introduce, distribute and sell your goods to 
foreign merchants who in turn sell them to the 
consumer and thus create a market for you 
from which ^^ repeat'^ orders will develop. 
Your original mail campaign will bring you 
in touch with both the American exporter and 
foreign importer, who will communicate with 
you as soon as you offer your product to them 
through the mail. Thus, the A of the Export 
ABC right along is the most important letter 
of the foreign trade alphabet 

INDENT AGENTS 

The indent agent is nothing but a purchas- 
ing merchant or agent. The word ^ indenting'' 
is used in lieu of the word ^^ ordering'' in Eng- 
land and her colonies. A great number of for- 
eign concerns, especially British, maintain 



EXPORTERS AND WEBB BILL 229 

their own offices or buying agents in this coun- 
try, To these purchasing or indent agents 
they send orders for all their requirements, 
which are filled by purchase in the open mar- 
ket at the best possible prices, conforming ex- 
actly to the principars requirements, and in 
every way protecting his interests in the mat- 
ter of prices, shipping routes, freight rates, 
insurance, etc. 

COMMISSIONS 

fUsuallv the indent merchant obtains a def- 
inite commission from his customer to pay him 
for his trouble, time and expense. These buy- 
ing commissions vary, but are generally fixed 
on a sliding scale, say 10% on orders under 
$1,000, 5% on orders under $5,000 and 
2J% on orders over $5,000 and 1% or even 
%% if the account runs into very large figures. 
When the foreign client places all his orders 
through one particular indent merchant, the 
commission is usually fixed at a definite figure, 
ranging from 1% to 2J% and applying on all 
purchases. 

The indent merchant, therefore, becomes 
the purchaser or foreign client, and naturally, 



230 A B C OF FOREIGN TRADE 

like any other purchasing agent, lie is not ex- 
pected to take commissions from the people 
from whom he buys. He buys at the closest 
prices, ships the goods, looks after freight 
rates and insurance and gives his clients the 
benefit of any reductions, allowances, commis- 
sions, cash discounts or rebates he can secure. 

He sends the original invoice, as received 
from the manufacturer, to his client, so that 
the client may see exactly at what price he 
bought. On a separate statement he adds his 
buying commission to the total of the invoice, 
so that he is reimbursed for money paid for 
the merchandise, plus his commission. As 
the indent merchant buys regularly for his 
foreign clients, they usually arrange a year in 
advance for the necessary funds, generally an 
open letter of credit in one of the banks against 
which he may draw for all purchases of his 
customer, the bank discounting his drafts, and 
advancing him the money necessary to pay for 
the merchandise. 

As far as you are concerned, therefore, the 
indent merchant is just as desirable and inter- 
esting an account as the exporter, and perhaps 
even more desirable than a foreign client, be- 
cause you deal with him directly on a domestic 



EXPORTERS AND WEBB BILL 231 

basis, without any of tlie complications or re- 
sponsibilities of foreign shipments. It is well 
then that he should be approached in your ef- 
forts to establish your line with just as much 
consideration as you approach the other desir- 
able prospects. 

coMBi:NrATiO]srs under the webb law 

The Webb Law as passed by Congress per- 
mits manufacturers of the same product to 
combine for purposes of foreign trade only. 
The Webb Bill sets aside the Sherman Anti- 
Trust Law, as far as foreign trade is con- 
cerned. Any combinations or organizations 
affected under the law would naturally do 
what otherwise you would do yourself to get 
business, except perhaps in a larger way. 

WEBB BILL 

[Public — No. 126 — 65th Coistgress.] 

[H. E. 2316.] 

An Act to Promote Export Trade^ and for 
Other Purposes 



<<• 



^Be it enacted hy the Senate and House of 
Representatives of the United States of Amer- 
ica in Congress Assembled, That the words 



232 ABC OF FOREIGN TRADE 

^export trade' wherever used in this Act mean 
solely trade or connnei:ce in goods, wares, or 
merchandise exported, or in the course of be- 
ing exported from the United States or any 
Territory thereof to any foreign nation; but 
the words ^export trade' shall not be deemed 
to include the production, manufacture, or 
selling for consumption or for resale, within 
the United States or any Territory thereof, of 
such goods, wares, or merchandise, or any act 
in the course of such production, manufacture, 
or selling for consumption or for resale. 

^^That the words Hrade within the United 
States' wherever used in this Act mean trade 
or commerce among the several States or in 
any Territory of the United States, or in the 
District of Columbia, or between any such 
Territory and another, or between any such 
Territory or Territories and any State or 
States or the District of Columbia, or between 
the District of Columbia and any State or 
States. 

^^That the word ^association' wherever used 
in this Act means any corporation or combi- 
nation, by contract or otherwise, of two or 
more persons, partnerships, or corporations. 

^^ Sec. 2. That nothing contained in the Act 



EXPORTERS AND WEBB BILL 233 

entitled ^An Act to protect trade and com- 
merce against unlawful restraints and monop- 
olies/ approved July second, eighteen hundred 
and ninety, shall be construed as declaring to 
be illegal an association entered into for the 
sole purpose of engaging in export trade and 
actually engaged solely in such export trade, 
or an agreement made or act done in the course 
of export trade by such association, provided 
such association, agreement, or act is not in 
restraint of trade within the United States, 
and is not in restraint of the export trade of 
any domestic competitor of such association: 
And provided further^ That such association 
does not, either in the United States or else- 
where, enter into any agreement, understand- 
ing, or conspiracy, or do any act which arti- 
ficially or intentionally enhances or depresses 
prices within the United States of commodities 
of the class exported by such association, or 
which substantially lessens competition within 
the United States or otherwise restrains trade 
therein. 

*^Sec. 3. That nothing contained in section 
seven of the Act entitled * An Act to supple- 
ment existing laws against unlawful restraints 



h 



234 j^ B C OF FOREIGN TEADE 

and monopolies, and for other purposes,' ap- 
proved October fifteenth, nineteen hundred 
and fourteen, shall be construed to forbid the 
acquisition or ownership by any corporation 
of the whole or any part of the stock or other 
capital of any corporation organized solely for 
the purpose of engaging in export trade, and 
actually engaged solely in such export trade, 
unless the effect of such acquisition or owner- 
ship may be to restrain trade or substantially 
lessen competition within the United States* 

**Sec. 4. That the prohibition against ^un- 
fair methods of competition' and the remedies 
provided for enforcing said prohibition con- 
tained in the Act entitled ^An Act to create a 
Federal Trade Commission, to define its pow- 
ers and duties, and for other purposes/ ap- 
proved September twenty-sixth, nineteen hun- 
dred and fourteen, shall be construed as 
extending to unfair methods of competition 
used in export trade against competitors en- 
gaged in export trade, even though the acts 
constituting such unfair methods are done 
without the territorial jurisdiction of the 
United States, 

^^Sec, 5. That every association now en- 



EXPOETERS AND WEBB BILL 235 

gaged solely in export trade, within sixty days 
after the passage of this Act, and every asso- 
ciation entered into hereafter which engages 
solely in export trade^ within thirty days after 
its creation, shall file with the Federal Trade 
Commission a verified written statement set- 
ting forth the location of its offices or places of 
business and the names and addresses of all 
its officers and of all its stockholders or mem- 
bers, and if a corporation, a copy of its certifi- 
cate or articles of incorporation and by-laws, 
and if unincorporated, a copy of its articles 
or contract of association, and on the first daj5 
of January of each year thereafter it shall 
make a like statement of the location of its 
offices or places of business and the names and 
addresses of all its officers and of all its stock- 
holders or members and of all amendments to 
and changes in its articles or certificate of in- 
corporation or in its articles or contract of 
association. It shall also furnish to the com- 
mission such information as the commission 
may require as to its organization, business, 
conduct, practices, management, and relation 
to other associations, corporations, partner- 
ships, and individuals. Any association which 



236 ABC OF FOREIGN TRADE 

shall fail so to do shall not have the benefit of 
the provisions of section two and section three 
of this Act, and it shall also forfeit to the 
United States the sum of $100 for each and 
every day of the continuance of such failure, 
which forfeiture shall be payable into the 
Treasury of the United States, and shall be 
recoverable in a civil suit in the name of the 
United States brought in the district where 
the association has its principal office, or in 
any district in which it shall do business. It 
shall be the duty of the various district attor- 
neys, under the direction of the Attorney Gen- 
eral of the United States, to prosecute for the 
recovery of the forfeiture. The costs and ex- 
penses of such prosecution shall be paid out 
of the appropriation for the expenses of the 
courts of the United States. 

^^ Whenever the Federal Trade Commission 
shall have reason to believe that an association 
or any agreement made or act done by such 
association is in restraint of trade within the 
United States or in restraint of the export 
trade of any domestic competitor of such asso- 
ciation, or that an association either in the 
United States or elsewhere has entered into 



EXPOETEES AND WEBB BILL 237 

any agreement, understanding, or conspiracy, 
or done any act which artificially or intention- 
ally enhances or depresses prices within the 
United States of commodities of the class ex- 
ported by such association, or which substan- 
tially lessens competition within the LTnited 
States or otherwise restrains trade therein, 
it shall summon such association, its officers, 
and agents to appear before it, and thereafter 
conduct an investigation into the alleged viola- 
tions of law. Upon investigation, if it shall 
conclude that the law has been violated, it may 
make to such association recommendations for 
the readjustment of its business, in order that 
it may thereafter maintain its organization 
and management and conduct its business in 
accordance vdth law. If such association fails 
to comply with the recommendations of the 
Federal Trade Commission, said commission 
shall refer its findings and recommendations 
to the Attorney General of the United States 
for such action thereon as he may deem 
proper. 

^^For the purpose of enforcing these provi- 
sions the Federal Trade Commission shall 
have all the powers, so far as applicable, given 



238 [A: B C OF FOREIGN TRADE 

it in * An Act to create a Federal Trade Com- 
mission, to define its powers and duties, and 
for other purposes/ '' 
Approved, April 10, 1918. 



CHAPTER XIX 

Traveling Salesmen — Codes and Cables 

Of course, you can sell your mercliandise, 
just as you do in this country, by sending a 
traveling salesman to the country in which 
you wish to do business. Naturally, you would 
have to be extremely careful in the selection of 
your man, for he is a long way from home. 
iWhen he starts on his trip he must be thor- 
oughly familiar with your merchandise and 
able to answer any questions that may be put 
to him concerning it. He is probably thou- 
sands of miles away from you and can not con- 
veniently ask you for information. If he does 
not have it at his finger's tip, he will make a 
very bad impression on your prospective cus- 
tomers and hamper the sale of your merchan- 
dise. If he has to cable for the information, it 
will increase the expense of selling, which at 
the best is very heavy when you have a man 
traveling in foreign countries. Too great stress 
can not be laid on the importance of picking 
the right man. You should exercise even more 

239 



240 A B C OF FOEEIGN TEADE 

careful judgment in the selection of a foreign 
salesman than you do in the selection of 
a domestic traveler. His expenses will 
be much heavier, he will have to display more 
initiative, more ability, more adaptability to 
strange conditions, customs and people, and he 
must, therefore, be of a higher caliber than the 
man you send out in this country. 

FOREIGlSr LANGUAGES 

It is practically a necessity that he speak 
Spanish and highly desirable that he speak 
French also. English is read and understood, 
although not spoken fluently, to a much greater 
extent all over the world than is generally be- 
lieved to be the case. But if your traveling 
salesman interviews a customer who can not 
fully understand him, and if the customer has 
to take the salesman to one of his friends or 
business acquaintances to have the conversa- 
tion translated, too much time would be lost 
and too little business would result. You know 
from your domestic experience that your sales- 
man's time means money and it certainly 
means a lot of money when the salesman is 



SALESMEN, CODES, CABLES 241 

traveling abroad. Therefore, it is not merely 
an advantage, but a necessity that he should 
have a knowledge of the language which is 
used commercially in the country he is to visit. 

QUALIFICATIONS 

That he must be acquainted with your prod- 
uct, your method of manufacture, your organ- 
ization and everything else connected with the 
goods you make and sell, goes without saying. 
Unfortunately, the things that ^^go without 
saying'' are in too many instances the very 
things that are overlooked. He may speak ever 
so many foreign languages; he may be the 
cleverest talker, the most likable chap, and the 
most adaptable man in the world, but he will 
do you no good if he is not fully posted on the 
one really essential thing — ^your product and 
the organization which stands behind it. 

The system, which has been explained in 
careful deta^il in a previous chapter of this 
book, with regard to selling goods in foreign 
countries by mail, holds good as far as the 
traveling salesman is concerned. If you offer 
your merchandise by mail to people who are 



242 :^ B C OF FOREIGN TEADE 

likely to buy it, offer it to them at tlie right 
price and tell them all about it. 

If the salesman is the right man and able on 
his own initiative to introduce your product 
to local prospects, you will make a great many 
sales to people of whom you never heard and 
who never heard of you before, simply because 
he hunted them out, and solicited their busi- 
ness in the right way. The salesman takes the 
place of your letter and your catalogue, but he 
has the advantage of personal acquaintance 
and of being able to answer questions without 
delay. 

FOBEIGN BRANCHES 

As you progress in your business, if you find 
the markets warrant such an enlargement of 
your organization, you may be able to estab- 
lish your own branches in foreign countries. 
This will depend very much on the money 
you have expended in building up your trade 
and whether the returns you have had justify 
such an expenditure after a few years' experi- 
ence. Your branch would handle the business 
for you just as your foreign agent would ex- 
cept that it would be directly under your own 



SALESMEN, CODES, CABLES 243 

control and a part of your own organization. 
The branch itself would then undertake to 
establish its own sub-agencies, and other chan- 
nels for the successful distribution of your 
merchandise. 

CABLES AND CODES 

For the purpose of transmitting commercial 
messages in an abbreviated and therefore more 
economical form, cable codes have been com- 
piled by several publishers. If you can cable 
to a client in Australia the word *^Adam,'' and 
if he understands and translates it to mean 
*^We hereby offer you the following merchan- 
dise firm for three days F. O. B. New York,'' 
it means a tremendous saving in cable tolls 
when you consider that each word cabled to 
Australia costs one dollar and eighty-five cents. 
This is the paramount reason why you should 
always employ a code where it is possible 
to do so. 

THE BENTLEY CODE 

Every code has its own advantages. "Always 
use the code your customer requests you to use 
or the one mentioned on his letter-head. You 



244 A B C OF FOEEIGN" TEADE 

will find that every foreign customer who 
transacts any considerable volume of business 
has on his letter-head a cable address, and also 
a list of the cable codes which he uses. If such 
is not shown on his letter-head, or if 
he does not request a special code, then use 
your own judgment as to which is most prac- 
tical for your purpose. In every code, except 
the Bentley Code, each word or number 
represents the meaning you wish to ex- 
press. Every cable company allows a maxi- 
mum of ten letters for one word. Any word 
having over ten letters is charged as two words. 
The Bentley Code takes advantage of this fact 
and has no code word that contains more than 
five letters. By joining one code word of five 
letters to a second code vford of five letters — 
cabling two code words as one word, you join 
two sentences and thus effect a considerable 
saving. On the other hand, the sentences ex- 
pressed in this way are very much shorter than 
those used in other codes. The following is an 
example in the Bentley Code : The five letters 
^^ Jeyde'' stand for ^^Eef erring to your letter 
of the 8th inst.," and the five letters ^^Abvie'' 
stand for ^^We accept.'' By joining the two 



4 



SALESMEN, CODES, CABLES 245 

words and cabling the one word ^^ Jeydeabvie," 
you tell your customer at the price of one word 
only, '^Referring to your letter of the 8th inst. 
"We accept.'' If you do not wish to use letters, 
you can use numerals, and the same sentences 
and same words would be made up as follows : 
^^13466" stands for '^^ Referring to your letter 
of the 8th inst." and ^^00102" stands for ^^ We 
accept"; so that when you cable the ten nu- 
merals, ^^1346600102," you convey the same 
meaning. 

CONSULT TELEGEAPH COMPANIES 

The next very useful and important appli- 
cation of code words is in the marking of sam- 
ples, or the private arrangement for accept- 
ances, quotations, prices, sales, etc. During 
war times it is not permissible to use any but 
the printed codes, as no private codes of any 
kind are allowed, and as a matter of fact, up 
to the time of the cessation of hostilities the 
government would not allow the registration 
of any new code or cable addresses of any 
firms. Nor would our own government permit 
any one to address or sign any cable by; 



246 3! B OF FOREIGN TRADE 

using simply his cable address. The full name 
of both the recipient and the sender had to be 
used in the cable. However, the greater part 
of these restrictions have now been abolished. 
As these regulations, however, may change at 
any time, you should consult the telegraph 
company as to the admissibility of coded mes- 
sages to the country to which you wish to 
cable. 

APPLICATION TO SAMPLES 

As private codes are again permissible, 
you should apply them to your samples. Sup- 
pose you sent your customer samples of three 
different kinds of shoes — ^let us say men's 
shoes, women's shoes and children's shoes. 
You tell him that he can have these shoes in 
black, brown or white, with buttons or laces, 
with or without caps, and quote him the prices, 
these prices being based on a sliding scale of 
discounts in proportion to the quantity or- 
dered. Now, suppose you arrange with him the 
following letters (which, of course, could also 
be done with numbers, but we will take letters 
in this instance) : ^^A" stands for ^^ men's 
shoes"; ^^B" stands for *^ women's shoes"; 
*^C" stands for ^^chHdren's shoes." ''D'\ 



SALESMEN, CODES, CABLES 247 

stands for ^^black''; ^^E'^ stands for *^ brown"; 
''¥'' stands for ^Vhite.^^ ^^G'^ stands for 
'faces''; ^^H" stands for ^^buttons''; ^^I'' 
stands for ^^caps"; ^^ J'' stands for ^^no caps." 
**K" stands for ^^ twelve pairs"; ^^L" stands 
for *Hwenty-four pairs"; ^^M" stands for 
*Hhirty-six pairs," and so on, the prices being 
quoted also on each quantity, less the scale dis- 
count granted in proportion to the quantity 
ordered. Then, if your customer wants to 
order thirty-six pairs of men's shoes — ^black, 

with buttons and with caps ^he would use 

the following five letters: ^^Madhi." If he 
wanted to order twelve pair of women's shoes 
—brown, with laces and without caps, he would 
use the following five letters: ^^Kbegj." And 
in this way, he could join together these ten 
letters and in one word cable, ^^Madhikbegj." 
*^ Thirty-six pairs of men's black bottom shoes 
with caps, and twelve pairs of women's brown 
shoes, with laces and without caps." 

PEIVATE CODES 

This example readily illustrates the advis- 
ability of using private codes. Of course, you 
can use words instead of letters to mean cer- 



248 ABC OF FOREIGN TRADE 

tain tilings, and again you can substitute 
numerals. Furthermore, you can apply this to 
all kinds of transactions, quotations, accept- 
ances, etc., and you can readily see from this 
what an indispensable thing a private or even 
a public code is in the prompt and economical 
transaction of business. Naturally, the codes 
will have to be adapted to your own particular 
business. They are just as useful for the char- 
tering of a ship as they are in the selling or 
buying of merchandise. It is not always neces- 
sary, in order to arrive at an understanding 
with your client, to make out a complete code. 
For example, if you send your foreign cus- 
tomer a letter offering a certain amount of 
merchandise at a certain price and at a certain 
delivery date, you can instruct him to wire 
merely the word ^^ Accept.'' 

When you do business by cable without the 
use of a prearranged code between your cor- 
respondent and yourself you should use one of 
the standard codes. Be very careful that you 
check each word. Check it at least twice before 
it goes out, as every letter has a different mean- 
ing and may make the translation of the cable 
impossible or may convey a meaning entirely 
different from the one intended. 



SALESMEN, CODES, CABLES 249 

After you have sent your cable you should 
confirm it by mail, and you should also con- 
firm a translation of it. This is best done by 
typing the code words on one side of the page 
and on the other side the translation. This will 
show any discrepancies or errors which may 
have occurred in transmission, and the re- 
cipient can compare his own translation with 
yours. 

The translation of a cable is very simple, as 
shown by the following example : 

1 Nef OS Others offering more 
1 Fyloz Favorable 

J lyzas Terms 
1 Occgo Eenewed 

J Lezwo 67 

1 Epwif Dollars and 50 cents 

J Dowage C. LF. 

I Abuuf If you accept 

J Niajy Will open 
1 Dunec Credits 

If you have not already a cable address you 
should immediately apply for one and register 
it with the cable offices. A cable address is 



250 :KB G OF FOREIGN TEADE 

simply a code word which, stands for the name 
and address of your firm. 

You should sign your cablegrams with your 
eable name or code address, because you have 
to pay for the address as well as the signature. 
For that reason you should always have your 
cable address printed on your letter-head, so 
that any one wishing to cable you may see how 
to do so at the least possible expense. 



CHAPTER XS 

Advertising 

If you do any foreign advertising the place 
where the advertising is to be done should be 
carefully considered and the medium carefully 
selected, and the fact borne in mind that what- 
ever you do should be done right, because it 
costs money. Usually a great deal of money. 

There are four ways by which goods can be 
sold through foreign advertising. In Ameri- 
can periodicals circulated in foreign countries. 
In export publications circulated in foreign 
countries. In American books published for 
circulation in foreign countries, and lastly in 
native or local newspapers, magazines and 
other publications issued and circulated in the 
countries in which you wish to introduce your 
merchandise. 

As regards the medium of American period- 
icals circulated in foreign countries: 

The author himself has frequently read 

251 



252 ABC OF FOEEIGN TRADE 

many of our leading American magazines in 
clubs* in Shanghai, Cape Town, Paris, Copen- 
hagen, and other cities all over the world, and 
has always found himself interested in and 
impressed by the advertisements. It's an in- 
direct but effective method. 

Next, we have to consider the medium of 
American export magazines, circulated in 
foreign countries. There are several of these 
publications on the market, and some of 
them are really of great value. You must 
consider, however, before incurring the 
expense, whether your line is suited to the 
class of people among which the magazine 
is circulated. Therefore, analyze the circula- 
tion and the actual results obtained before you 
decide definitely and then do not bind yourself 
to too long a contract. It is also most im- 
portant, when considering the circulation, to 
know whether the magazine goes only to the 
consuls, agents of the publishers, clubs, li- 
braries, government offices and the like, or 
whether it really goes to established merchants, 
live prospects and other actual purchasers of 
merchandise. 



ADVERTISING 253 

a;MERICAN BOOKS FOR EXPORT 

For export this has to be considered in the 
same serious manner as advertising in period- 
icals. The same principles apply and it is 
just as important. Never sign a contract for 
more than one year, at the very most, and 
never contract for an indefinite or lengthy 
period until the publication has given you real 
proof of results. 

r0REIG:N" PUBLICATIOlSrS 

"As far as advertising in foreign publica- 
tions is concerned, this should not enter 
into your calculations at all unless you open 
foreign branches, or unless you make an ar- 
rangement by which your foreign agent agrees 
to advertise with you on a participation basis, 
so that some of his own money is involved. Nat- 
urally, you could not choose these mediums in- 
telligently, but would have to leave the selec- 
tion to your foreign &gent. While this matter 
is mentioned in this book, in order to complete 
the circle, it is a phase of advertising you 
should consider only when your export busi- 



254 ^ B C OF FOEEIGN TRADE 

ness is highly developed, and then only if your 
local agent or personal representative in the 
foreign country insists on your doing such 
advertising. 



CHAPTER XXI 

Foreign Markets 

Nowhere will you find common sense so val- 
uable as in the selection of foreign markets. 
As you get further into the export business 
you will get a broader vision of a number of 
things, particularly of foreign countries and 
peoples. In a general sense, the three things 
which define the character of a foreign market 
are climatic conditions, population and living 
conditions. 

As to climate, you know, of course, that 
southern India is a hot and tropical country 
the year around. You know that Australia 
has a winter and a summer season, and you 
know that Siberia during winter is about 
the coldest country in the world. In your do- 
mestic business you know that people go to 
Florida and Southern California in the win- 
ter because of their warm climates ; that thej^ 
go to Alaska if they like the cold and snow, 
and that it rains in Oregon more or less con- 
tinually during the winter season. Under 

255 



256 :a; B OF FOEEiaN TRADE 

those conditions, if you are manufacturing fur 
gloves you would not try to find a market for 
them in Florida or Southern California. On 
the other hand, if you make raincoats and um- 
brellas you would realize that Oregon should 
be one of your most profitable fields. You 
would not think of trying to build up a busi- 
ness in Alaska for sunshades or straw hats. 
Climatic conditions have the same relation to 
jour product in the export field as they have 
in your domestic market. Just use your judg- 
ment and common sense, therefore, in deter- 
mining to what extent your product is affected 
by climatic conditions. 

This would not refer so much, let us say, to 
railroad supplies or automobile accessories, 
but even here local conditions should be con- 
sidered. 

As far as population is concerned there are 
always two classes of people to be found in ev- 
ery country in the world — the natives and the 
foreigners who live there. It does not matter 
how remote or obscure a country may be ; how 
uncivilized; how undeveloped or how uncom- 
fortable, there are always Europeans and 
Americans to be found there in greater or 



FOREIGN MARKETS 257 

lesser numbers. Therefore, there is always 
a certain, though sometimes very restricted, 
need for such articles as Europeans and 
Americans are accustomed to, subject of 
course to local and climatic conditions. In 
other words, even a Norwegian, who is used to 
a fur coat in his own country, would have no 
use for it in the heart of Africa. On the other 
hand, all articles which fit into the standard 
of living to which Europeans are accustomed 
are salable to them in whatever quarter of the 
globe they may be f oimd. 

The natives, however, differ in their needs 
in all countries, and you will soon learn as to 
their special requirements, through your re- 
turns and reports from any given foreign 
field. You know, as you learned at school, that 
the natives of Africa are very fond of glass 
beads and bangles ; that the natives of the Sol- 
omon Islands are fond of tobacco, and so on. 
But in addition to these primary things a 
great number of articles have been introduced 
to natives all over the world and have found 
a ready market and an entirely unexpected 
use that formerly were entirely unknown to 
them. In China millions of yards of blue cloth 



258 ^ B C OF FOEEIGN TRADE 

are used for the only garment which the coolie 
wears when he is working. Thousands of bales 
of lamp wicking are shipped to that country, 
a great proportion of which is used by the 
natives for belts on account of its soft texture. 
Lamps are bought in immense quantities. 
Just as in China, each country reveals market- 
ing opportunities that are perhaps unsus- 
pected and more or less of a surprise to you 
as you study them, first as to the quantity of a 
certain given article which can be disposed of 
in a country, and secondly, as to the variety of 
uses to which many American and European 
products are put by the native population, 
very often quite contrary to the use to which 
we put them. 

Now, as to the question of living conditions. 
You naturally can not sell large quantities 
of bathroom fixtures or high-grade plumbing 
supplies to primitive peoples unaccustomed to 
our standards of sanitation and hygiene. 

A proper analysis of foreign markets would 
require a book of itself, but the United States 
Bureau of Foreign and Domestic Com- 
merce issues a great number of publications 
that you can buy at nominal cost, giving 



FOEEIGN MAEKETS 259 

such facts as have been collected by our consuls 
in foreign countries. You should use this valu- 
able material, so that you do not go blindly 
into the foreign fields in which you seek to do 
business. This data is so complete in most 
cases and represents such a remarkable ex- 
penditure of time, money, labor and research 
that nothing more valuable to you as a manu- 
facturer or exporter could be found anywhere. 



CHAPTEE XXII 

The Eomai^ce of Expoetikg 

The author trusts that the foregoing pages 
will have served, to some degree, to acquaint 
you with the practical phases of foreign trade. 
The book deals with business, and business 
only, and therefore is largely a recitation 
and explanation of commercial terms, usages, 
methods and documents. As such it may be 
perhaps dry reading unless your enthusi- 
asm for what the export business really signi- 
fies should supply you with the inspiration to 
see in these pages something more than just a 
compilation of facts and figures. There is no 
business in the world so full of romance, so 
full of interest and of adventure as is the ex- 
port business. There is no business in which 
you may engage that you will love as you can 
learn to love the business of shipping goods 
into foreign countries, dealing with foreign 
peoples and supplying diversified human needs 
to every corner of the globe. If you can get 
this spirit; if you can learn to inhale the 

260 



ROMANCE OF EXPORTING 261 

breath of foreign civilizations and feel the 
pulse of distant peoples as it comes to your 
desk in every morning's mail, you will realize 
the thrill and the greatness of the romantic 
business of export trading. There is nothing 
in the world that quite compares with it, noth- 
ing in the way of business that has the charm, 
variety, interest, and excitement, nor the deep 
^and abiding satisfaction, that foreign trade 
'will bring you when once you grasp its true 
spirit. When you sell and ship goods abroad 
you do something not only for the foreign pur- 
chaser, but also for your industry, for your 
country and for the community in w^hich 
you live. 

If you help to introduce American goods into 
foreign markets on a creditable basis, you help 
to inspire abroad admiration and respect for 
American labor^ ingenuity, intelligence and 
skill. You will then be doing for your country 
something quite wonderful, indeed, because the 
greatness of nations nowadays is measured 
largely in terms of commercial supremacy. 

If you increase the output of your factory, 
or of the factories whose export you are han- 
dling, you increase the industrial development 
also of the community and of the nation. You 



262 ABC OF FOEEIGN TRADE 

help labor by increasing the demand for its 
product. You help the railroads, you help the 
seaports in this country from which the goods 
are transported and you help the steamers 
that transport them. 

It is entirely up to you to see the 
romance in your own particular line of 
business. Nobody else can do that for you. 
You must see it and feel it for yourself. 

There is something indescribably romantic 
about a ship, something which has touched the 
imagination of prince and peasant, priest and 
prophet, poet and philosopher, since time out 
of memory. The craft of the early Phoenicians, 
the galleys of Rome, the vessels of the Vikings, 
the armada of Columbus, the sails of the 
adventurers and discoverers of the sixteenth 
century — ^what memories they stir and what 
fires they kindle! Pioneers of foreign com- 
merce, and forefathers of the myriads of ships 
that constitute the colossal tonnage of shipping 
the world possesses to-day. 

The great British Empire is largely a collec- 
tion of colonial possessions, bound together by a 
fleet of vessels, and by the commerce they cre- 
ate. It could not exist without ships. 



EOMANCE OF EXPORTING 263 

The romance that attaches to a ship extends 
to and embraces its cargo. The ^* Golden 
Argosies/^ celebrated in classic song and 
story, were in fact but the export trade of 
ancient times, glorified by the colorful fancy 
of poet and singer. May we not in our own 
generation see and feel the same romance, and 
respond freely to its appeal ? 

Every ship that sails the seas links its home 
country to foreign lands by carrying cargoes 
back and forth for barter and trade. There 
are some who, unhappily, are so constituted 
that they can not see anything in all this but 
gross materialism — ^the pruning of profits and 
the clinking of coins. But it means much more 
than that. It means the bringing of the lamp 
of civilization itself to light up the dark places 
of earth. Perry carried such a torch with him 
^in the ships he took to Japan. He found there, 
barely a generation ago, a nation steeped in 
medievalism. To-day Japan is co-equal with 
•the most advanced nations of the world in 
commerce and trade, in achievement and intel- 
lect — in a word, full partner in our modern 
civilization. This is one of the more striking 
examples of what ships have done to help 



264 :a: B C OF FOEEIGN TRADE 

make a nation great. Japan is a veritable 
child of the export business, and in turn has 
become the parent of an enormous volume of 
foreign commerce of its own. 

Each product has its own particular phase 
of adventure, usefulness or service. The au- 
thor will cite, by way of illustration, one in- 
stance taken from many of his own experi- 
ences, and which will, perhaps, enable you to 
see and feel the romance of foreign trade, if 
you are at all so inclined. It is the case of a 
little pump ordered by an American mining 
engineer in the copper mines of Katanga. 
Katanga is situated in the Belgian Congo, 
north of Zambezi River. Its copper mines are 
controlled by Belgian and British capital and 
■employ several mining engineers. 

The order comes to your desk bearing the 
postage stamp of the Belgian Congo. It took 
three months for the letter to reach you, in 
which your client orders a pump which you 
have offered him by mail. Water is needed 
for the white man's camp in one of the mines 
outside of Katanga and the pump is to sup- 
ply the cool refreshing drink so necessary in 
a tropical country. 



EOMANCE OF EXPOETING 265 

There tlie letter lies on your desk and you 
ivisualize all that it signifies. You manufac- 
ture the pump or take it out of your stock. 
lYou box it, strap it, mark it, get your export 
declaration, arrange for steamer space and 
ship it. You get the documents passed through 
the bank and you write to your customer ad- 
ivising him of the despatch of his engine. 

Then the case containing the little piunp is 
off on its way from your factory, let us say, 
in the heart of Indiana to the seaport of New 
. York. In New York the railroad delivers it to 
a drayman. It is carted to the dock, put into 
a sling with a lot of other merchandise, and 
is hoisted on board the steamer. The vessel 
sails, and your product goes with it in the hold 
of the big ship across the Atlantic Ocean, 
through rain, storm and sunshine, dodging 
icebergs and perhaps floating mines — ^vagrant 
relics of the great World War, — ^until it is 
landed safely at Cape Town in South Africa. 
The boat pulls up at the dock. High 
above the city towers Table Mountain 
with its famous cloud, which settles over it 
every day and covers it like an immense table- 
cloth. Natives swarm on the deck by the hun- 



260 ^ B G OE FOEEIGN TEADE 

dreds, open the hatches, dive into the hold 
and take out the merchandise which was stored 
in it at New York. There is our little pump, 
undamaged! It is put into a sling, hoisted on 
the dock and a card is tacked on it, marked for 
Katanga. Then it is carted to the freight 
office of the South African Government Eail- 
road. There it lies until it is taken on one of 
the small trains that run through British 
South Africa. Off goes the train, through 
Kimberly with its great diamond fields; 
through dense jungles where lions howl by 
mines; far up and through Ehodesia until it 
gets to Bulawayo, the capital of British Eho- 
desia. There our pump is in the heart of 
South Africa, in surroundings quite differ- 
but from those in which it was created, and still 
not yet at the end of its journey. It is taken 
from that train and put on to another train, 
that journeys from Bulawayo to Elizabethville 
in the Belgian Congo. Once more it goes on, 
through dense jungles where lions howl by 
night, where elephants still roam at liberty 
and where snakes and tigers and all the beasts 
of the jungle still enjoy their native freedom; 
north of the Zambezi Eiver, beyond the most 



EOIVIANCE OF EXPORTING 267 

beautiful waterfall in the world, in the heart 
of that part of Africa made famous by 
Livingston and Stanley. It arrives now at 
Elizabethville. There it is discharged by na- 
tives of a very different type from those 
who unloaded it at Cape Town. It is taken 
to a *' go-down," which is the local name 
for a warehouse, where it is piled away with 
other stuff intended for the mining dis- 
trict of Katanga. When all the packages are 
assembled for that particular mine, a safari or 
caravan of natives is collected and each man is 
given one package to carry, for which he is held 
responsible, and for the safety of which he is 
ready, literally, to give his very life. There 
they stand, a long line of well-built, husky 
natives, seeking shelter from the sun under the 
waving palms. Off they go, each man carry- 
ing his box or bundle on his head. So they 
march for many weeks, through the hot days 
and damp nights, through jungle and plain, 
through swamp and stream. Each carries his 
load on his head, and one of them is carrying 
our little pump. With the safari go several 
armed native soldiers, who protect the caravan 
from the beasts of the jungle. And so they 



'268 :A: B C OF FOEEIGN TEADE 

'march, camping out at night, until after many 
weeks of travel, adventure and hazard the case 
containing our pump is delivered at its desti- 
nation to the American engineer. He unpacks 
it, puts it to work, and it pumps up the 
fresh, pure, clear drinking water which he and 
his fellows need for life and health and which 
heretofore he has had to have pumped up la- 
boriously by hand at the close of each day and 
stored away against the next day's needs. 

Wouldn't you feel that you had done some- 
thing really worth while for your fellow man, 
for your country and for civilization itself, if 
you had shipped that little American pump 
into the heart of Africa to supply water to a 
group of brave and hardy men, laboring to 
extract from the hidden recesses of earth the 
copper so essential to modern industry? Is 
there no romance in a business that can do this 
for a fellow man? Is there not something 
more than mere selling, mere shipping, mere 
filling of orders, and mere changing of dollars 
and cents ? Is it not true romance in its most 
appealing aspect? 

Now, just visualize every order in that way 
if you can follow it, — and when you get better 



RO^iANCE OF EXPORTINO 269 

acquainted with your foreign business, you will 
be able to follow it to a very considerable ex- 
tent. Tbere are invisible threads spun from 
your desk into the heat of Africa or the cold 
of Lapland, the gay cities of South America 
or the steppes of Russia; invisible threads 
from your desk, your factory, your brain in! 
China, Japan, Siberia, India. Every sale you 
make establishes such a thread; every sale you 
make is a service to some fellow being, and the 
more distant he is from you and the more dif- 
ficult it is to reach him, the greater will be his 
need and the more, therefore, wiU your ser- 
vice to him take on the character of a bene- 
faction. 

THE END 



H 348 85 a 












~ "l^ . « • 




». ^^ 







>^.oO">>^ •*\0^..--* -^C 













V _. '^«^ '••* 






i5'=J^ - 



CL *^ 






X,^^ - 







4* • 




^^.^^^^ * 






















<rL ^ 




«^^^ 



^ 9 * -** .^ 



r. V.^-^*^ /aVa\ -^^.^^ 




4,V *!• 



V.^'4'" 'i^ 



'e/-'^*>* v-^-'\-* ^^^^--y *' 






o5''^ -1 






1^ - • • 





'<>, •♦.'• ^<»^ 









a5 °^ H 



q.. ♦. 



:'V 







* --^ajsy.' /X •'^^- **'\ \^-- /'-^^ 



k* '^^ 



<^°^ '} 







^* <J.^ •*♦ • 



.♦ V> 






«5 °v«. .1 



>°-n^. V 













%.^^ 












BINDERY INC. 





KJ^£!??^«''«' -/ *^ 



